The Civil Code of Thailand is the main law establishing and recognizing the business formations as below:
- Ordinary Partnership
The ordinary partnership requires at least 2 partners and requires all partners to be fully liable for all debts and obligations of the business.
- Limited Partnership
Requiring at least 2 partners just like the ordinary partnership, there are 2 types of the partners. One is limitedly liable depending on how much of the shares he is holding while the other is liable for all debts and obligations of the business.
- Limited Company
Limited company requires at least 3 founders/shareholders to form and register a limited company (commonly referred as “Co., Ltd.”) with Department of Business Development (DBD). It is the only popular type of business formation when you want to have a separate legal entity form the partners. Similar to the Limited Partnership, all partners are liable according to their portion of the shares they are holding. Once registered as a limited company, the company is obligated to file corporate income tax and financial statement, which needs to be complete by a certified auditor (CPA). Any changes regarding the registered information such as directors, shares, capital, name, and address must be submitted and updated with DBD by prescribed period. If the company fail to comply so, the directors and/or shareholders may be fined or even imprisoned. This is why you should have a knowledgeable corporate lawyer to take care of this headache and keep you safe from unnecessary risk.
There is no mention about a solo owned business in the Civil Code of Thailand. A solo owned business is not recognized as a legal entity, but it runs everything under and on behalf of the name of person who solely owns such business. You don’t need to register a solo owned business, however, DBD has issued some regulations which a solo owner must follow for the purpose of personal income tax tracking.
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