principal forms of business organization under Thai law
are sole proprietorships, partnerships, limited companies
and public limited companies. In addition, branches of
foreign corporations are recognized, and may be required
to be registered to do business in many economic sectors.
"Representative" or "liaison" offices
of foreign companies are not recognized as distinct legal
entities, and may be treated as branch offices for tax
and other purposes.
companies provide for, among other things, a flexible
joint venture structure, and are generally, the form of
business organization preferred by many foreigners doing
business in Thailand.
Seven people must be present to sign and witness a duplicate
copy of a memorandum of association to form a limited
company, and the following details must be provided:
information such as names, addresses, and occupations
of the promoters and the number of shares which
they control. It should be noted that at least one
share must be promoted by each promoter.
that the shareholders' liability is subject to limitations.
number of shares and average value thereof . This
is to represent the capital structure of the company.
name (the word "limited" must be included
in the title) and registered location of the company.
The company name must be translated into the Thai
language, but transliterations into other characters
may be registered also.
approval of the memorandum, rules and regulations within the
company must be discussed and implemented at the first shareholder
meeting. This is in regard to the election of directors and
auditors, and other duties regulated by statute must be done
at this meeting as well.
vital step in forming a limited company is adopting the articles
of association. This is done to outline the way in which a company
will be managed and organized.
contributions must not fall below 25 % of the average value
of the shares, and must be collected by the directors. Shareholders
are liable for the unpaid capital amount of their shares.
this has been done, an application for registration of the company
must be submitted. Beyond containing all statutory requirements,
the application must be submitted along with a statement regarding
the director's powers, and which director's signature is legally
binding in respect to the company. This statement is made public
knowledge by appearing on the company's certificate.
company's registration must be completed within three months
of the statutory meeting. There is however, no time limit in
regards to when the meeting will take place.
of Limited Companies:
companies are required to have a minimum of seven shareholders.
a company has been officially formed the directors are responsible
for management of the company. Directors may be re-elected,
but a minimum of one-third are required to retire annually.
However, this requirement of mandatory retirement may be overruled
by a shareholder resolution.
a poll is demanded, every person holding shares or proxy, and
is present at a shareholder meeting has an equal vote. This
is the case regardless of the amount of shares owned or represented
by any given shareholder. In order for a poll to take place
it must be demanded by at least two voting shareholders. How
the articles of association have been written will determine
the way in which votes are counted. In some cases the articles
may insist that only a block of shares with a minimum amount
be required for a vote. Cases such as this may require that
those holding shares under the amount specified be required
to pool together with other shareholders in order to vote.