Closing a Thai Company

Searching for accurate and appropriate guidance and assistance on closing a Thai limited company? Of course, considering that the process is quite intricate, you’d require legal, as well as assistance from an accountant to complete the process. At BLS, our experts would help you close a Thai limited company in the most appropriate manner. Here’s more to closing a Thai limited company.

Closing a limited company certainly involves a lot of aspects, some of which are intricate to extent that they demand legal assistance, as well as help from a financial expert, for instance, an accountant. Closing a Thai limited company isn’t an exception to this fact. Moreover, if the Thai limited company has accumulated debts while operating the business, it could take the authorities some time to settle everything, and then finally close the company.

Closing a Thai limited company is fundamentally comprised of two steps. The first is dissolution, and the second one is liquidation. While dissolution refers to the official termination of the company’s legal existence (except for asset liquidation), liquidation, on the other hand, is concerned with debt payments, asset distribution, and settling everything. So, as we proceed, we will be taking a look at both these steps one by one.

Dissolution of a Thai limited company is based on court orders, operation of law, or a special resolution.  One can say that a Thai limited company is dissolved, if the following conditions are fulfilled.

• The company ran into bankruptcy.
• Company’s regulations that mandate the company’s dissolution
• The company was formed for a particular project or an assignment, and now it is accomplished or it is over.
• The company was formed for a limited period of time, and which is over now.

However, court orders too can dissolve a company. But this could happen on account of the following.

• If the company suspends its business operations for an entire year.
• If the existing number of shareholders reduces to less than 3.
• If the company can only be operated at a loss, without any chance or a scope of recovery.
• If the company does not start its operations within a year of registration.

Nevertheless, there are many other factors leading to the dissolution of the company, including a decision to close the company taken by the owners of the company. But, to do so, it is necessary for the owners to call a general meeting of the shareholders, and to pass a special resolution concerning the dissolution of the company.

Let us now look at the liquidation process of a Thai limited company.

• On registering the dissolution of the company, and the appointment of the directors of the company, the role of liquidators begins.
• They must, at the earliest, prepare a balance sheet, and get it certified through an auditor, and then call a general meeting of the shareholders.
• Despite the dissolution of the company, the Thai Civil and Commercial Code, in section 1248, clarifies that the general meeting would be similar to the meetings held during the company’s existence.
• Hence, it is necessary that the liquidators publish a notification in the newspaper, and notify the shareholders. However, this notification must be sent no later than seven days before the meeting’s scheduled date.
• The agenda of the meeting would be for shareholders to confirm the balance sheet, and also authorize the liquidation process to proceed.
• Usually, to settle the company’s affairs, the liquidators are authorized to take actions such as selling the company’s assets, conduct business until whenever as deemed necessary by them, filing lawsuits, etc.
• While the liquidation process is on, liquidators must file a report with the DBD in every three months, comprising of necessary factors such as the current accounting of the liquidation process, and that they will be kept open for inspection purposes by creditors and shareholders.
• On completely liquidating the company’s assets, the liquidators must prepare a final accounting of the liquidation, and call a final general meeting of the shareholders by again publishing a notice in the newspaper, and notifying the shareholders about the meeting, but no later than seven days before the scheduled date of the meeting.
• In this final meeting, shareholders will approve the final account prepared by the liquidators.
• Later, the liquidators should register the completion of the liquidation process with the DBD within 14 days of the meeting. It takes 400 baht to register the completion of the liquidation process, and another 120 baht to certify the completion of the liquidation process.
• Lastly, according to the Civil and Commercial Code, the accounts, books, and the company documents must be deposited at the DBD within 14 days of the meeting. These documents should be kept open public inspection for 10 years.

For additional information, and for complete guidance and assistance through the dissolution and the liquidation process, get in touch with the experts at BLS.