The registration process involves a number of steps. Lotus Ledger can help you set up a Thai Limited Company that is compliant with all legal requirements.
Having a registered company can improve access to financing as lenders are more inclined to grant loans to companies that are legally registered. It can also facilitate access to corporate banking, allowing for easy management of the company’s financial operations.
Choosing a Company Name
The company name you choose will have a profound impact on your business’ identity and credibility in Thailand. It is essential that it aligns with regulations and cultural expectations. Furthermore, it must be legally approved to avoid complications down the road. This process can seem daunting, but engaging with experts streamlines the entire journey from a business idea to a registered company in Thailand.
A Limited Company is the most popular type of business entity in Thailand, offering liability protection for shareholders. It is a relatively easy structure to set up and operates similarly to LLCs in other countries. The name “Limited” signifies that the company’s shareholders are only liable for their investment in the company, protecting them from additional financial risks beyond their capital contribution.
When choosing a company name, it is important to check whether it is available through the Department of Business Development (DBD). In order to avoid the hassle of having to change your company name later on, it is recommended that you come up with several alternative names and conduct a thorough search before submitting your application to the DBD.
The DBD will review your application, ensuring that it meets legal requirements. It will then approve your company name and publish it in the Government Gazette. Once approved, you will receive your Certificate of Registration, which officially confirms that your business is registered.
Creating the Memorandum of Association
When establishing your company in Thailand, you will need to submit required documents and pay registration fees. These requirements can vary depending on the business structure you choose. Narai Partners’ experts are available to help you navigate the process, ensuring that all paperwork is filed correctly and that your company meets all necessary regulations.
When it comes to registering a company, the first step is preparing the Memorandum of Association. This document includes your company’s name, address, business objectives, and registered capital (including the type, number, and value of shares). The MOA must be signed by at least one of your promoters. The signatures must also match those on your application form. If you are a foreign national, you will need a valid passport and visa to sign on behalf of your company.
The MOA will also include specific provisions for protecting the rights of minority shareholders, as dictated by law. It will outline quorum thresholds for shareholder gatherings, voting rights and methods, director appointments and obligations, and profit allocation guidelines. If you need to change the MOA, you will need to hold a shareholder meeting and pass an extraordinary resolution, which requires broad shareholder support. The company should then enroll the amendment with the Department of Business Development within fourteen days. Depending on the scope of the amendment, additional endorsements may be needed from the Securities and Exchange Commission or the Stock Exchange of Thailand.
Organizing a Statutory Meeting
A Thailand limited company registration is the most common form of business in Thailand. It is a business structure that divides its capital into shares, which are owned by investors (shareholders). The shareholders’ liability is limited to the amount unpaid on their shares. This is in contrast to a Sole Proprietorship or Partnership, where the owners’ liabilities are unlimited. This is the reason why a Thai Limited Company is the preferred business structure for most investors in Thailand.
Before a Thai Limited Company can begin operations, it must organize a statutory meeting and register its incorporation papers. This meeting must include the company’s shareholders, directors, and auditor. In addition, the shareholders must approve the company’s bylaws and elect directors. They must also ratify the initial expenditures and appoint an auditor. The statutory meeting must be held at least 9 days before the company is registered.
After the statutory meeting, the company must prepare its financial statements and submit them to the Department of Business Development within one month of the Company’s financial year end. Depending on the type of business activities, the company may need to register for Value Added Tax or Specific Business Tax. Lotus Ledger’s legal team can assist with determining these obligations. Lastly, the Company must open a bank account to deposit its income. The process of opening a corporate bank account in Thailand can be complex, so it is important to understand the requirements and documentation.
Registering the Company
The company’s first step will be to reserve a unique company name. This can be done with the Department of Business Development (DBD) under the Ministry of Commerce and the chosen name must comply with naming rules. It must also be different to any other company names that have already been registered in Thailand, either in Thai or English.
After this, the promoters must convene a statutory meeting where they will agree on the Articles of Association which includes details such as the company’s purpose and operations, types of shares and their rights and responsibilities, the number of directors and the auditor. The meeting will also decide if the company will have foreign shareholders and it is at this point that the stamp duty is paid, which varies according to the type of company.
A few months after the statutory meeting, the company will be able to apply for a tax identification number and later register for Value Added Tax (VAT) if it has over 1.8 million in annual revenue or conducts business in a VAT-liable industry. A local bank will be able to help the company open a corporate account once it is registered. The company will also be able to display its name board at its main office and any branches within 30 days of its registration.