Tlp Vs. Ltd

[Guest DragonStar]

Hi,

I've heard from trustworthy side, that in some situations (incl. mine), its a better option to form a Thai Limited Partnership (TLP) rather than form a "real" company (LTD).

However, setting up a TLP requires much less paperwork and is a lot cheaper, so there must be some drawbacks as compaired to the more cumbersome affairs of a LTD. Anyone around having experience with TLP's?

I have little doubt that the TLP edge actually is the better option in my situation - as long as that situation remains basically the same (running one, small business-place together with my Thai wife). But how about eventual expansions.

Let's say we want to include yet another business-place - meaning, among other things, that we need to hire staff. Could that situation also be covered by the existing TLP (except for required changes to the documents) - or would we, at that time, have to form a LTD?

DragonStar

[~G~]

However, setting up a TLP requires much less paperwork and is a lot cheaper, so there must be some drawbacks as compaired to the more cumbersome affairs of a LTD.

Drawbacks:

1. Greater Personal Liability than in a Co., Ltd.

2. No possiblity for a foreigner to legally control the partnership. You are always at the mercy of your Thai partner. In a company, even if you only have minority share, as a managing director you can have almost absolute control.

Let's say we want to include yet another business-place - meaning, among other things, that we need to hire staff. Could that situation also be covered by the existing TLP (except for required changes to the documents) - or would we, at that time, have to form a LTD?

No problems with hiring staff. The next office to mine is a Limited Partnership, they have many more staff than my company does.

Edited November 2, 2005 by ~G~

[Mali_in_CM]

Does a TLP get a falang a work permit?

[Guest DragonStar]

Does a TLP get a falang a work permit?

<{POST_SNAPBACK}>

... with a TLP, the officials considering your WP application, have the legal right to grant you the WP - If that's what they want ...

[Sunbelt Asia]

Why the Limited partnership is a very bad way to form a business...

A foreigner cannot be involved in the day to day operations as a manager, if he does, he will be considered having the same liability as the Thai which is unlimited.

The foreigner cannot have control.

When applying for a work permit, The funds for the registered capital must be shown in a bank account. ( 2 million Baht for a work permit unless the applicant is married to a Thai, then its 1 million Baht)

The foreigner cannot be on the bank account.

You as the foreigner are at the mercy, being told any day " Your services are no longer needed"

www.lawyer.th.com

[Guest DragonStar]

Thanks, ~G~ and Sunbelt

I think I've got it. - By forming a TLP instead of LTD, you can save a few bucks and a few cart loads of paperwork, here and now and maybe later. However, this could mean that - even if you make a 10 M B/year business - you might end up totally pennyless e.g. if your Thai partner should die before you.

With a LTD, you'd be entitled to 49% - assumed you've secured yourself to the max - also in case of tragic events.

[~G~]

With a LTD, you'd be entitled to 49% - assumed you've secured yourself to the max - also in case of tragic events.

<{POST_SNAPBACK}>

Right. Furthermore, if you are the Managing Director and sole signatury authority of a company, you have control over the bank account/s. You can set your own salary as high as you like, do almost everything without requiring the approval of shareholders. They are required in a few cases, for example when opening a new bank account, when distributing dividends, and when the company closes down.