A Limited Company, particularly a Private Thai Limited Company, is the most popular form of business structures in Thailand. Its key features are:
Section 1096 of the Thai CCC (Civil and Commercial Code) has provided that “A limited company is that kind of which is formed with a capital divided into equal shares, and the liability of the shareholders is limited to the amount, if any, unpaid on the shares respectively held by them.”
This is a kind of company which is formed with a capital divided into equal shares, the liability of the shareholders being limited to the amount unpaid on the shares respectively held by them.
Corporate name reservation
The name to be reserved must not be the same or close to that of other companies, which approved by the Commercial Registration Department at the Ministry of Commerce. The approved corporate name is valid for 30 days. No extension is allowed.
Establishment of Company Limited
In order to establish a company limited, the registration must be processed according to the following:
1. Must have at least 3 persons signing together in order to prepare Memorandum and then register. Upon receiving the amount of shares, the director must register as the company within 3 months from the date of company’s meeting to establish the company.
The promoters must have the following qualifications :
(1) Be ordinary person, not juristic person
(2) Be 12 years old or above
(3) Must reserve to buy at least 1 share
Information used to register the Memorandum
(1) Company’s name (the same as the name reserved)
(2) Location of head office (located at which province)
(3) Objective of the company
(4) Registered capital must be divided into each share with the same value (share’s value must be at least 5 Baht)
(5) Name, address, age, occupation and number of shares that persons who start up the company reserve to buy the shares)
(6) Name, address, age of 2 witnesses
2. When the Memorandum has been registered, shall perform the following:
(1). Every promoter can manage to reserve and buy all the shares
(2). When all the shares are reserved, the promoters must not delay to hold a general meeting of subscribers which shall be called the statutory meeting.
3. Meeting agenda.
(1) The adoption of the regulations of the company, if any.
(2) The ratification of any contracts entered into and any expenses incurred by the promoters in promoting the company.
(3) The fixing of the amount, if any, to be paid to the promoters.
(4) The fixing of the number of preference shares, if any, to be issued, and the nature and extent of the preferential rights accruing to them.
(5) The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up otherwise than in money, if any, and the amount up to which they shall be considered as paid-up.
The description of the services or property in return for which such ordinary shares or preferred shares shall be allotted as paid-up shall be expressly laid down before the meeting
(6) The appointment of the first directors and auditors and the fixing of their respective powers.
No resolutions of the statutory meeting are valid unless passed by a majority including at least one half of the total number of subscribers entitled to vote, and representing at least one half of the total number of shares to such subscribers.
4. The promoters shall turn over the business to the directors.
5. The directors shall request the promoters and subscribers to pay forth with upon each share payable in money such amount, not less than twenty-five percent of the share’s value.
6. When the collection of share’s price is complete, the authorized director shall prepare the request for the registration of company’s establishment and submit to the registrar.
Regarding the submission for registration, the authorized director shall sign the name on the request and must submit to register within 3 months from the date of company statutory meeting. If not registered within the specified period, the company statutory meeting shall be void and if would like to register to establish the company, shall arrange the meeting for persons who reserve to buy the shares again.
3. Regarding the company establishment, if can perform every step as follows within the same day that the promoters prepare the Memorandum, and the director can request to register the Memorandum and register the company within the same day.
(1) Shall have the persons reserve to buy all the shares that the company can be registered.
(2) Arrange the meeting to establish the company to consider various affairs according to the Civil and Commercial Code, section 1108, and all the persons who start up the company and all the persons who reserve to buy the shares shall attend the meeting, and all of them shall agree in the affairs in the meeting.
(3) Persons who start up the company assign all the affairs to the director.
(4) The director call the person who reserves to buy the shares to pay the shares according to the Civil and Commercial Code, section 1110, section 2 and such share’s price has already been paid.
The registration for a company limited shall be divided into 2 steps as follows:
1. Registering the Memorandum.
2. Registering the establishment of a company limited
Tax ID Number Registration
Businesses liable for income tax must obtain a tax I.D. card and number for the company from the Revenue Department within 60 days of incorporation or start of operations. Since Feb 2012 the Revenue Department accept the Registration Number issued by DBD to be Tax ID number.
Business operators earning more than 1,800,000 Baht per annum must register for VAT with in 30 days of the date they reach 1,800,000 Baht in sales.
2. For the new rules and regulations in registration of a new company in Thailand, please notice that:
a, A private company, mostly the foreigner or foreign company can hold maximum 49% and the other 51% will be held by Thai, to follow this regulation you should to find Thai shareholder for start business, the foreigner or foreigne company can hold more than 50% up to 100% to be majority shareholder by 4 channels, please contact us for more information.
b. In case the foreign investment lower than 50% or being signatory director, all Thai shareholders must present evidence of source of funds issued by bank (it’s mean letter issued by bank to prove that related fund are keeping at bank), refer to DBD’s Regulation no.205/2555.
Required Documents for Company Registration:
Required Documents for Tax ID Number registration: please be informed that since Feb 2012 the Revenue Department accept the Registration Number issued by DBD to be Tax ID number.
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