This article we are going to give you essential information and useful about Thai Company Registration which good for your preparing to set up a Thai company for both intentions a Thai company holding or a Thai company operation.
What is a Thai Company Limited?
In general, meaning of a Thai Company Limited is a business association consist of minimum 3 shareholders. The management is carried out by an authorized director which is under the control of the general meeting of shareholders and company’s constitution. It has the character of a legal person distinct from its officers and shareholders. In order words, this allows the company to own property in its own name. As well as insulating the owners of the company against personal liability etc.1
A Thai Company Limited means a kind of company which forms with a capital divides into equal shares by 3 minimum shareholders or more. The liability of the shareholders will limit to the amount unpaid on the shares respectively held. By contrast of law, in some countries like USA. The court may ‘lift the corporate veil’ and subject the ‘shareholders’ to personal liability. But in Thailand the liability of the shareholders is limited.2
Note that personal liability of shareholders and director(s) are under difference rules. Learn more about company management
What is the Advantage of Setting up a Thai Company Limited
A Thai Company Limited has a Thai nationality. In order word, a Thai company limited has the same Rights and Duties with a Thai natural person. Having said that, when setting up Thai Company, it can perform a business and own a property. Moreover, it more advantage for business tax. Some businesses may applicable for tax exemption form the BOI. Let’s go step by step how to set up a Thai Company Limited.
Step 1: Giving the Company Name
3 names both in English and Thai. This to make sure that one of them will be available and not forbidden by the law. Keep this in mind, royal family name, government agency name, banking, finance, credit foncier and insurance etc. can not use as a company name!
Step 2: Making the Company Memorandum
A Memorandum is a declaration letter of 3 promoters. Having said that the memorandum to express their intention of establishing a Thai company. Contain with the following particulars; Name, Location, Objective, declaration of the limit of liability of the shareholders. Also the amount of share capital, details of the 3 promoters. The memorandum will submit to Business Department.3
Step 3: Subscribing to Buy a Company Share
All 3 promoters must subscribe to buy company shares at least one share.4
Step 4: Make a General Meeting.
The general meeting for adopting the following.5
a) Article of association or regulation of the company (if there is).
b) The expense incurred by the promoters in promoting the company
c) The number of preference shares, (if there is) and the nature and extent of the preferential rights of the preference shareholders.
d) Payment of company shares.
e) Appoint the company director and the company auditor(s).
Another key thing to remember, article of association has a major impact on a majority power. It creates a full control of the board of shareholder and the company by the preference. The key is the preference shares which is not only a one type of share. But also having different voting rights with the common share.
Step 5 Make a Share Payment
After the General meeting. The share capital must be paid not less than 25% of company capital. The company capital in theory is Minimum 15 baht by combination of Section 1100 and 1117 of CCC. But in practice, no company is set up with this minimum amount. With this in mine, in case of Work permit the minimum capital is 2,000,000THB. In other situations, if the capital is more than 5,000,000THB. The Thai and/or Foreigners shareholders must provide Bank Statement certificates.
Step 6 Making the Application
The application for registration a limited company consist of the following from.
(a) company register, called Bor Jor 1.
(b) the Company limited registration certificate, the memorandum, called Bor Jor. 2).
(c) the list of establishment registration, called Bor Jor 3.
(d) the objective, called Wor.
(e) 5 the details of directors, called Kor.
(f) the list of shareholders, call Bor Jor 5).
Step 7 Register with the Company Department
The final step is to provide to the competent officer the application and required documents and information and done.
All things considered, the Director(s) isn’t a Real Big Boss, Therefore how to structuring a Thai company to have a full control of your company is the most important! Importantly, rights always comes with duties. Set up Thai Company, you compulsory need an accountant/auditor. This for tax and financial filing. The yearly balance sheet is under the responsibility of the director to be true and accurate.6
If you have a question about set up Thai Company in Phuket. Or, if you are are in need of a Thai Company lawyer to assist you with setting up a Thai Company. Feel free to contact us, you will NOT be charged for the first session to determine your needs.
- the Thailand Civil and Commercial Code (CCC), Section 1098, 1097, 1108, 1015, 1110, 1144
- the CCC, Section 1096
- the CCC, Sections 1097 and 1098
- the CCC, Section 1100 of CCC.
- the CCC, Section 1007 and 1008.
- the CCC, Section 1196 and 1206.