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.
In today’s dynamic business world, the success of corporate governance largely depends on fulfilling a multitude of secretarial works, legal necessities, and constitutional compliances. No matter it is a small business set up or a large business corporation, corporate secretarial services are essential for the success and existence of a business.
Corporate secretarial services are simply services undertaken in order to comply with the regulatory requirements put forward by a company’s registered jurisdictions. These services are usually carried out by reputable law firms.
In the Kingdom of Thailand, corporate secretarial services are primarily offered in connection with the formation and registration of new company, Thai limited partnership, and procedures for filing in order to qualify for protection under the Treaty of Amity and Economic Relations between the United States and the Kingdom of Thailand.
However, in most cases, these services are categorized into: basic services, services in connection with attending of meetings on behalf of clients, and complex projects. Basic secretarial services consist of maintenance of statutory books, filing of returns, and provision of company secretary. Among the complex corporate secretarial projects are procedures in connections with the purchase of shares, restructuring of company, modeling of financial statements, implementation of management systems and control, and registering and reregistering of companies.
Depending upon the unique requirements of corporate clients, services offered in connection with corporate secretarial vary from firms to firms. As mentioned earlier, corporate services consists of establishment of business structure in Thailand, providing advice on foreign investment rules, providing advice on exchange control, maintenance of statutory records and company filings, processing and monitoring trade documentation, and providing advice on international trade as well as trade finance. In some instances, corporate secretarial services in the Kingdom of Thailand include:
- Providing facilities in order to keep and maintain company books and company seals
- Arrangement for the provision of nominee directors
- Proper maintenance and revision of company statutory registers and minute books
- Organizing as well as attending of meetings of directors
- Preparation of resolutions for the purpose of meetings of directors and shareholders
- Preparation of minutes for annual general meetings and extraordinary general meetings
Some legal firms provide such services as:
- Local advertising
- Establishing as well as maintaining directors’, shareholders’, and officers’ registers
- Arrangement for banking relationships and maintenance of bank accounts
- Filing statutory records with the government authorities of the Kingdom of Thailand
- Liaising with auditors, brokers, legal advisors, accountants, custodians, and shareholders
- Filing of annual returns
- Ensuring efficiency of corporate firms through maintenance of separate fax, telephone, and other electronic services for the company
Different types of corporate secretarial services also cover providing guidance as well as practical support to directors, communicating with shareholders in order to ensure that due regard is paid to their interest, providing assistance and advice for establishing corporate actions such as bonus issues and script issues, and ensuring that all of the company’s activities including holding of shareholders’ meetings, issuance of notice, maintenance of statutory records, dividend payments and corporate governance, are carried out in accordance with the requirements of Companies Act and Regulatory authorities. Above all, corporate secretarial services also consist of preparation of share certificates and registers and company searches.
Corporate secretarial services rendered by reputable law firms provide a host of benefits to corporate clients. One of the key benefits is that it allows you to focus on your core business activities. Another advantage is that these services undertaken by good service providers ensure that all the activities with regard to company is carried out and maintained in good standing.
Thailand has a plethora of law firms to render the best in corporate secretarial services. But, it is important that you should make a thorough investigation with regard to the professionalism as well as the way they render the corporate secretarial services, prior to approaching a law firm in Thailand. It must also be checked whether the attorneys are licensed by the Law Society of Thailand.
Many of the reputable law firms assist and guide their clients through the business and legal environment. Some of them even address prospective issues that a new investor may encounter. There are also some reputable law firms in Thailand that render a range of management functions to its corporate clients, such as, accounting, banking, and invoicing services, apart from corporate secretarial services.