Company structure is a vital decision for entrepreneurs as it impacts their business operations. Different structures come with their own benefits and restrictions, which must be aligned with your business needs.
A limited company is a good option as it offers legal protection to shareholders by restricting their personal financial liability to the value of their shares in the company. It also allows for easy registration with the VAT and Labor Departments.
Naming the Company
Choosing a company name is the first step in Thailand Limited Company Registration. A minimum of 3 names are proposed, ranked by preference, and checked against existing Thai registered names. The approved name will be valid for 30 days, after which a memorandum of association (MOA) must be filed and the company registered.
The company is then recognised as a legal entity with its own rights, liabilities and duties, independent of the shareholders. It can also open a corporate bank account and obtain tax ID number and other government documents. The process varies depending on the chosen business structure, but with AsiaVerify’s direct access to source documents and instant translation technology, the process can be streamlined and the results auditable. Our professionals will ensure all required paperwork and documents are prepared.
Memorandum of Association
The Memorandum of Association is a legal document that defines the company’s objectives, activities and limitations. It also helps in decision-making and provides guidance to the management and directors. However, the MoA can be restrictive and may prevent the company from pursuing new opportunities or entering into new markets.
The MoA includes clauses relating to the company’s name, address, object and capital structure. It also outlines the company’s liability and other important details.
The MoA should be prepared carefully to ensure that it is in line with the company’s goals and business objectives. It should also be clear and concise. Furthermore, the MoA should be drafted before the company starts business operations. The company must also hold a statutory meeting to convene and approve the MoA.
Shareholding Requirements
The company is required to adhere to strict accounting procedures and submit annual financial statements. This will ensure transparency and accountability, fostering trust among stakeholders.
A company stamp must be used to sign legal documents and bank transactions. It also serves as proof of the company’s authenticity.
The company must have at least two shareholders (the minimum requirement was three until February 2023). The majority of shares must be held by Thais. The rules are intended to prevent the use of nominee shareholders. However, foreign ownership of a company can be achieved through BOI promotion and in limited cases. This is based on the specific categories of business allowed under the law. The company must maintain a book of share register in accordance with the law.
Financial Requirements
The authorities might request verification of the capital contributions made by the shareholders as part of the registration process. They may also need proof of the capital to determine if the company is eligible for certain activities that require specific licenses or permits.
A Limited Company is the most popular type of business structure in Thailand. It requires a minimum of 3 stockholders, and each stockholder’s liability is limited to the par value of their shares.
Companies that require a higher level of transparency can choose to register as a Public Limited Company (PLC). These businesses are required to disclose all details, including financial statements, to their investors and stakeholders. They must also issue share certificates to their shareholders and maintain an updated book of register.
Tax Requirements
There are some specific requirements for registering a company in Thailand depending on the type of business and its structure. For example, if a company will be liable for income tax it must obtain a tax identity card and register in the social security system. It must also comply with accounting procedures and submit annual balance sheets.
Entrepreneurs from all over the world choose to open a company in Thailand because of its robust government incentives, adequate infrastructure, reasonable prices and highly trained workforce. With proper preparation and professional guidance, a limited company can be registered within several days. The process involves reserving a name, drafting and filing the Memorandum of Association, convening a statutory meeting and obtaining the required documents to open a bank account.