Put and call option Q&A - Singapore - statutory and consideration requirements

Sep 16, 2026

Country-specific guidance on put and call option arrangements for private company acquisitions under Singapore law. Covers whether statutory pre-emption rights exist and what may need to be waived, whether enforceability requires consideration and what form it may take, and whether mandatory rules restrict dividend or distribution apportionment. Also addresses seller undertakings and warranties when option exercise involves share issuance, including authority, valid issuance and paid-up status, and protection against breaches, encumbrances and dilution-related effects.

LanguageEnglish

CategoryLetters

FormatPDF

Pages4

Reading Time2 min

AccessFree to download

Put and call option

Statutory pre-emption rights and waiver

Consideration for grant and enforceability

Dividend and distribution apportionment

Seller undertakings when exercise is by issued shares

Put and call option Q&A: Singapore by Mark Cooper, Adrian Chan, Joel Teo and Enoch Ang, Hogan Lovells Lee & Lee This document is published by Practical Law and can be found at: [uk.practicallaw.com/W-007-2879](uk.practicallaw.com/W-007-2879)[ ](uk.practicallaw.com/W-007-2879)To learn more about legal solutions from Thomson Reuters, [go to](go to legal-solutions.co.uk)[ legal-solutions.co.uk](go to legal-solutions.co.uk) This Q&A provides country-specific commentary on Standard document, Put and call option agreement: Cross-border and forms part of Cross-border private company acquisitions. Put and call option 1. Are there any statutory provisions in your jurisdiction granting pre-emption rights to private company shareholders that would need to be waived before an option is granted or exercised? There are no statutory pre-emption rights for existing shareholders under Singapore law. However, for listed companies, under the Singapore Exchange Securities Trading Limited (SGX-ST) listing manual (Listing Manual) the company’s constitution must give pre-emption rights to existing shareholders (subject to any contrary direction by the shareholders in a general meeting or elsewhere in the Listing Manual) . 2. Is a form of consideration required for the grant of a call or put option? Can this consideration be a nominal amount or the grant of a call option (with respect to a put) or the grant of a put option (with respect toa call)? If the contract containing the call or put option is executed as an agreement (as opposed to a deed), consideration must be given for it to be enforceable. However, if the contract under which the call or put option is granted is executed as a deed, consideration is not necessary to ensure enforceability. The consideration given does not need to be monetary; it can be the reciprocal grant of a call or put option, or some other right that has value to the receiver. It is not necessary for the “value” to be appraised or tobe objectively sufficient; it need only be sufficiently valuable to the particular receiver to support the option being granted. 3. Is there any mandatory provision in your jurisdiction that limits the freedom of the parties to decide how dividends (or other distributions) related to shares subject to an option should be apportioned (for example, the seller’s right to retain the benefit of the dividends until the option is exercised by the buyer)? There is no mandatory provision that limits the freedom of the parties to decide how dividends (or other distributions) related to shares subject to an option should be apportioned. The parties to a contract can agree how to treat distributions related to shares subject to an option (if this complies with the rules under the relevant company’s constitution and the prevailing laws on distributions) . 4. If the consideration payable by the buyer on exercise of an option is shares to be issued by the buyer, what undertakings should theseller consider obtaining from the buyer (for example, the buyer has proper authority to issue the relevant shares and/or valid authority for the disapplication of any applicable pre-emption rights)? In this scenario, the seller would be entitled to expect a standard set of fundamental warranties, including: • The buyer is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation. • The buyer has the right, power and authority to enter into and perform its obligations under the option agreement and any related agreement. • The buyer has taken all necessary corporate or other actions to authorise the execution, and performance by it, of its obligations under the option agreement. • The option agreement and any related document constitute binding obligations on the buyer. • The shares have been properly and validly issued. • The shares are fully paid or credited as fully paid. • The portion of the buyer’s allotted and issued share capital that

FAQs

Are there statutory pre-emption rights in Singapore that must be waived before a put or call option is granted or exercised?

There are no statutory pre-emption rights for existing shareholders under Singapore law. For listed companies, the Singapore Exchange listing rules require the company’s constitution to provide pre-emption rights subject to directions under the Listing Manual.

Is consideration required for a call or put option in Singapore, and can it be non-monetary?

If the option contract is executed as an agreement, consideration is required for enforceability. If executed as a deed, consideration is not necessary. Consideration can be reciprocal rights under the option or other valuable rights, without needing objective sufficiency.

Does Singapore law impose mandatory rules on how dividends or distributions tied to option shares are apportioned?

No mandatory provision limits how dividends or other distributions related to option shares must be apportioned. Parties may agree treatment of distributions, provided it complies with the constitution and applicable distribution laws.

Sep 16, 2026

Upload by Lucas Vance