Company registration is a crucial step in the establishment of a business in Thailand. It allows third parties, such as investors and banks, to examine the company’s financial state and shareholders list.
Company registration in Thailand is a complicated process with several complexities. It is recommended to seek professional guidance.
Registration of Memorandum of Association
A memorandum of association is a legal document that establishes a company’s fundamental principles and objectives at its inception. It includes essential details such as the company’s name, registered office address, and share capital. It is a requirement by Thai law that all limited companies have an MOA.
A private limited company is the most common type of business in Thailand. It has characteristics similar to those of Western corporations, including limited liability for shareholders. A shareholder’s liability is limited to the remaining unpaid amount, if any, of the par value of shares. However, the directors’ liability may be unlimited if stipulated in the company’s MOA.
To register a company in Thailand, you must submit a Memorandum of Association (MOA). This document specifies the company’s name and address, business objectives, share capital, and number of shares. You must also include the names of at least three promoters. The MOA must be signed by the promoters.
Reserved Company Name
When setting up a company in Thailand, the first step is to reserve the company name. This can be done online and normally takes 1-3 days to approve. The name must not be the same as or resemble the names of any existing registered company in Thailand and it must end with the word ‘limited’. Other guidelines include that names associated with the royal family, government units, ministries, or other companies, names against public moral, and names misleading to the public must not be used.
The next step is to prepare the Memorandum of Association (MOA). This includes the company’s objectives, capital, shareholders, and other details. It is also legally required to convene a statutory meeting to make appointments such as directors. In addition, if foreign shareholders or employees will be working in the company, they will need to apply for work permits. A company can begin its operations after all the above steps are complete.
Meeting of Shareholders
Once the company’s capital structure has been determined, shareholders will be able to vote on the type of shares they would like to hold. Ordinary shares grant voting rights and entitle holders to all dividend distributions while preference shares give them priority over assets claims in the event of a company dissolution.
It is important to understand that a registered Thai company is considered a separate legal entity. This means that the company’s creditors are not liable for debt repayment by its shareholders. This also makes it difficult for third parties to sue the company’s shareholders for any agreements they might have made with the company.
During the meeting, the chairman should ask shareholders to sign an attendance sheet. Although it is not a legally required document, this step helps verify that the quorum has been reached. Shareholders should also be informed that the company will take minutes of the meeting. These should include the name-surname, address, age and nationality of each shareholder.
Company Registration
Company registration is done after drafting and filing the Memorandum of Association, reserving the company name, convening a statutory meeting and completing other formalities. All these steps can be facilitated by our experienced consultants.
Once the company has been registered, a corporate bank account can be opened at a local bank in Thailand. Depending on the type of business activities, the company may need to register for Value Added Tax and follow accounting procedures.
Companies wishing to register as a limited company must have a minimum capital of 1 million baht. The company should be majority Thai-owned, unless it engages in sectors that are restricted by the Foreign Business Act. In this case, the company must have a ratio of four Thai employees for every one foreign employee hired. The company must also register its regional office and adhere to regulations governing these offices. The company must register its directors with the Department of Business Development and appoint an auditor to audit the company.