Thai Business Partnerships. Business partnerships offer a flexible and accessible model for entrepreneurs operating in Thailand. Whether between Thai nationals, or between Thais and foreigners, the form and obligations of the partnership must be carefully considered to ensure compliance with Thai law and protect the interests of all parties involved.

The regulation of partnerships is mainly found under the Civil and Commercial Code of Thailand (CCC), Sections 1012–1095.

Types of Partnerships Under Thai Law

1. Unregistered Ordinary Partnership

Characteristics:

• No separate legal entity.

• Partners are personally and jointly liable for all partnership obligations.

• Formed through mutual agreement; no registration required.

Risks:

• Personal assets of partners are exposed to business debts and lawsuits.

• No clear legal separation between business and personal activities.

When Used:

• Small businesses or family enterprises operating informally.

2. Registered Ordinary Partnership

Characteristics:

• Becomes a separate juristic entity upon registration.

• Must register with the Department of Business Development (DBD) under the Ministry of Commerce.

• Can own property, enter into contracts, sue, and be sued in its own name.

Partner Liability:

• Still joint and several, unlimited liability for partnership debts.

• Individual partners remain personally liable even after registration.

Advantages Over Unregistered Partnerships:

• Greater business credibility.

• Ability to operate as a distinct legal entity.

3. Limited Partnership

Characteristics:

• Requires at least one general partner (unlimited liability) and one limited partner (liable only to the extent of their capital contribution).

• Must be registered with the DBD.

• Limited partners cannot manage the partnership; if they do, they risk losing limited liability protection.

Structure:

• Clear differentiation between management/control rights and liability exposure.

Common Uses:

• Investment structures where passive investors fund businesses without exposing personal assets.

• Foreigners occasionally use limited partnerships in joint venture arrangements.

Partnership Formation Requirements

• Name reservation through DBD’s online system.

• Partnership agreement (preferably in writing) setting out:

  • Capital contributions.

  • Profit-sharing arrangements.

  • Management authority and obligations.

• Registration application filed at DBD regional offices.

Documents typically required:

• Identification documents of partners.

• Office address verification.

• Partnership regulations (if applicable).

Taxation of Partnerships

Notes:

• Partnerships must withhold taxes on payments like rent or service fees.

• VAT registration is required if annual revenue exceeds the legal threshold (currently 1.8 million baht).

Key Legal Risks in Thai Partnerships

Important Legal Principles

• Partnership Dissolution: Can occur voluntarily, by expiration of term, by mutual agreement, bankruptcy, or court order.

• Partner Retirement or Death: Partnership can continue if so agreed in the partnership agreement; otherwise, may trigger dissolution.

• Authority of Partners: Each partner is presumed to have full authority unless limited by agreement and third parties are notified.

Practical Advice for Forming a Partnership

• Draft comprehensive partnership agreements that define:

  • Voting procedures.

  • Capital obligations.

  • Succession planning.

  • Dispute resolution mechanisms (arbitration clauses are common).

• Clearly record partner roles (managing vs. limited).

• Carefully register ownership structure if engaging in activities sensitive under the Foreign Business Act.

Conclusion: Partnership as a Powerful But Risky Tool

Business partnerships in Thailand offer straightforward paths for small and mid-sized businesses but expose participants to significant personal risk unless carefully structured and managed.
Understanding the distinct legal character of different partnership forms — and the obligations they impose — is critical to building a durable, lawful, and profitable enterprise.