As in the case of most of the countries, Thailand primarily consists of three types of business organizations, such as, sole proprietorships, partnerships, and limited companies. Among which most popular type of Thai business unit is limited companies, which include private and public companies.
However, the most common form of business units in Thailand is private limited companies. In general, the limited companies in Thailand are similar to the Western Corporations. Discussed in detail in this article is regarding the procedures involved in the different types of companies in Thailand.
For the registration of a private limited company in Thailand, there must be at least a minimum of seven promoters. In the case of public limited companies, they must have a minimum of 100 shareholders, and no single entity must hold more than 10% of the stock, and 50% of the stock must be possessed by small shareholders.
A company incorporated in Thailand has option to apply in order to get their securities listed in the Securities Exchange, as either ‘Authorized’ or ‘Registered’, under the Securities Exchange of Thailand Act of 1975. Let it be a private limited company or a public limited company, in order to form a limited company, it includes several important steps.
First and foremost step in the process of the Thai company registration is the reservation of the desired company name with the DBD (Department of Business Development), Ministry of Commerce. On the approval of the name, the registration becomes valid for a period of up to 30 days.
However, prior to the registration of the company, it must be decided who will be the promoters and shareholders of the company. Registration processes also include organization of statutory meeting, during which such matters as official address, company objectives, and the amount of share capital to be registered, are discussed.
The next step is the filing of a Memorandum of Association (MOA), which must be inclusive of the objectives of the company, the company name that has been approved, company’s authorized capital, the desired location of the company, and the directors’ extent of liability. In addition, the Memorandum of Association must contain the name, nationality, occupation, age, and address of at least seven shareholders, of which at least one must be Thai. All of these shareholders must be natural persons, and they actually sign the original application form.
Further, it is necessary that all of them should at least subscribe to a minimum one share of the company each. As a next step, develop an attractive logo as well as a company stamp with the logo. With regard to the registered capital, it is important that there must be proper amount of money in your bank account. Also, update your bank account.
Another step with regard to the registration of the limited companies in Thailand is the submission of the Articles of Association, which contains company details pertaining to the types of shares, structure and distribution of shares, voting rights, dividend information, directors, auditors, quorum, and all other important characteristics and regulations that are related to the company.
Once the Article of Association is submitted, the company’s registration process is completed. Later, the Certificate of Registration, along with supporting documents, is issued to the company. On the receipt of the Certificate of Registration, obtain your company tax identity card and number from the Revenue Department. After this, approach the bank with company tax ID card and other relevant documents to open a bank account. Then, seek the assistance of an expert accountant for further company proceedings. Later, apply for VAT (Value Added Tax) with the Revenue Department.
Further, on registration of the company, it is important that company’s accounting procedures must comply with the Accounts Act, the Civil and Commercial code, and the Revenue Code. A balance sheet must also be prepared yearly and filed with the Department of Revenue and Commercial Registration.
However, the procedures involved in the process of company registration in the Kingdom of Thailand are quite a daunting experience because of its complicated laws, regulations, and language. Hence, it is recommended to seek the assistance of a specialist consultancy firm or an expert as well as licensed Thai lawyer for company registration purposes.
They help you carry out a range of activities with regard to the registration of company, including, selection of appropriate company name, financial consulting, legal consulting, drafting of company by-laws and business objectives, developing shareholder structure, coordinating Thai shareholders, preparation as well as filing of the Memorandum of Association, registering Corporate Tax and VAT, creating company logos and seals, and setting up of bank accounts.
For nearly 30 years, Bamrung Suvicha Apisakdi Law Associates (BSA Law) has focused on providing reliable legal advice and services to the Thai and foreign business community in Thailand. We provide international standards of legal services while retaining the customs of the Thai business culture.
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