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Business in Thailand |
Company
Establishment
Thailand recognizes
three types of business organizations.
Limited Companies
 There
are two types of limited companies, privately held and public. The
first is governed by the Civil and Commercial Code, the second by
the Public Company Act.
For a private
limited company, the Memorandum of Association and the Articles
of Association specify the rights and responsibilities or the shareholders.
Shareholders enjoy limited liability, up to the remaining unpaid
amount of the par value of their shares. A minimum of seven shareholders
is required at all times. Aliens may wholly own a private limited
company, but if they participate in business activities reserved
for Thai nationals their participation is allowed only up to 49
percent. For a private limited company the registration fee is 5,500
baht per million baht of capital
Public limited
companies, subject to compliance with the prospectus, approval,
and other requirements, offer shares, debentures and warrants to
the public and may apply to have their securities listed on the
Stock Exchange of Thailand (SET). A minimum of 15 promoters is required
for the formation and registration of the memorandum of association
of a public limited company, and the promoters must hold their shares
for at least two years before they can be transferred. The Board
of Directors must have a minimum of five members, at least half
of who are Thai nationals. The registration fee is 2000 baht per
million baht of capital for a public limited company.
Partnerships
Thai and Western
concepts of partnerships are broadly similar. Thailand provides
for three general types of partnerships:
- Unregistered
ordinary partnerships, in which all partners are jointly and wholly
liable for all obligations of the partnership
- Registered
ordinary partnerships, with the partnership becoming a legal entity,
separate and distinct from the individual partners
- Limited partnerships
with partner liability restricted to the amount of capital contributed
to the partnership
Joint Ventures
A joint venture
may be described in accordance with general practice as a group
of persons or companies entering into an agreement in order to carry
on a business together. It has not yet been recognized as a legal
entity under the Civil and Commercial Code but has been identified
under the Revenue Code, which classifies it as a single entity.
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