Types of Business organisations

		Forming a Company Types of Business Organizations Visas and Immigration Law Importation of Funds Taxation in Thailand Treaties to Avoid Double Taxation

A. Partnership

Thai and Western concepts of partnership are broadly similar. Thailand provides for three general types of partnerships:

• Unregistered ordinary partnerships, in which all partners are jointly and wholly liable for all obligations of the partnership
• Registered ordinary partnerships. If registered, the partnership becomes a legal entity, separate and distinct from the individual partners
• Limited partnerships. Individual partner liability is restricted to the amount of capital contributed to the partnership. Limited partnerships must be registered.

B. Limited Companies

There are two types of limited companies, i.e., private or closely held companies, and public companies. The first is governed by the Civil and Commercial Code, the second by the Public Company Act.

Private Limited Companies in Thailand have basic characteristics similar to those of Western corporations. A private limited company is formed through a process, which leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws), as its constitutive documents.

Shareholders enjoy limited liability, i.e., limited to the remaining unpaid amount, if any, of the par values of their shares. The liability of the directors, however, may be unlimited if so provided in the company's memorandum of association or the articles of incorporation. A board of directors according to the company's charter and by-laws manages the limited company.

All shares must be subscribed to, and at least 25 percent of the subscribed shares must be paid up. Both common and preferred shares of stock may be issued, but all shares must have voting rights. Thai law prohibits the issuance of shares with no par value. It also stipulates that only shares with par value of five baht or above may be issued. Treasury shares are prohibited.

A minimum of seven shareholders is required at all times. Aliens may wholly own a private limited company. However, in those activities reserved for Thai nationals, aliens' participation is generally allowed up to a maximum of 49 percent.

C. Joint Venture

A joint venture may be described in accordance with general practice as a group of persons (natural and/or juristic) entering into an agreement in order to carry on a business together. It has not yet been recognized as a legal entity under the Civil and Commercial Code. However, income from the joint venture is subject to corporate taxation under the Revenue Code, which classifies it as a single entity.

Thailand's Board Of Investment (BOI) provides the above information. For more detailed information see the BOI's website at http://www.boi.go.th/ .