49% Company Ownership

[mikebell]

My marriage has broken up and I have put my house on the market.  I have 3 grown-up farang children as beneficiaries and always promised my wife a 25% split of the sale price.  I now learn that because I used my wife as a 48% shareholder in the company, she is entitled to 48% of the deal as I have effectively gifted the shares to her.  I bought the house before we were married.

Is there any recourse in law or is this a cautionary tale to warn others?

[baansgr]

What's yours before marriage  is yours, what's obtained during marriage is split down the middle. Who told you she is entitled  to 48%

[cornishcarlos]

4 minutes ago, baansgr said:

Who told you she is entitled  to 48%

 

Probably her ????

[RichardColeman]

So, what's the connection between the house and the company ? I would imagine if you listed the house as a company asset then all bets are off.

[KittenKong]

24 minutes ago, mikebell said:

...... because I used my wife as a 48% shareholder in the company, she is entitled to 48% of the deal as I have effectively gifted the shares to her. 

Not only that but presumably someone else owns the 3% of your house that you (49%) and she (48%) apparently don't own.

There are ways round this (agreed loans, different share types) but as far as I know they have to be implemented before the house purchase.

[Peterw42]

1 hour ago, baansgr said:

What's yours before marriage  is yours, what's obtained during marriage is split down the middle. Who told you she is entitled  to 48%

In this case, the OP didnt own a house prior to marriage, at best he owned half a company prior to marriage and the company owned a house. Its not clear but it appears his wife probably owned the other half of the company prior to marriage, or as the OP says, was gifted half the company (maybe during marriage). If she owns half the company, she is entitled to half the companies assets. It doesn't really come under marital/non marital assets if its gifted.

Edited October 13, 2018 by Peterw42

[Peterw42]

1 hour ago, mikebell said:

My marriage has broken up and I have put my house on the market.

OP, you dont own a house, you own less than half of a company that owns a house. I imagine if the other half of the company was acquired by your wife "during" marriage, you could maybe argue that the wifes half is a marital asset and a 50/50 split. I think the gifting of a 50% share in something would negate a 50/50 split of marital assets, 

Edited October 13, 2018 by Peterw42

[FritsSikkink]

1 hour ago, baansgr said:

What's yours before marriage  is yours, what's obtained during marriage is split down the middle. Who told you she is entitled  to 48%

The law, when she got 48 % of the shares of the company which owns the house.

[baansgr]

13 minutes ago, FritsSikkink said:

The law, when she got 48 % of the shares of the company which owns the house.

When companies are set up,  a release form is signed at the same time so transfer can be done.  If Mikes lawyer didn't do that then there is a problem.

[dickjones2018]

you need a lawyer and even you die tomorrow, your kids will have to bring in new funds to pay for their share... in fact you own nothing and they will get nothing except a problem house as no farang can own land and try to live in a house, where the land belongs to your ex-wife of their self-entitled family members, if she would to die ... you might get a one way ticket of some high raise balcony dives from a hotel, kinda suicide

[Delight]

The way that I understand it when a Farang buys property via a company he will own max 49% of the company .The other 51% will be owned by Thais that he has never met. However it is constructed such that the Farang has 100% of the voting rights.

When the company is sold I assume that his 49% is transferred to the new Farang owner along with the 100% voting rights. To repeat this is my assumption. No doubt others can correct me. I am advised by friends that have sold companies that the cost to transfer is sub 10,000 Baht

Either way the 51% Thai owners do not get a pay day.The 48% of shares in your wifes name stay with the company.No pay day for her

The actual transfer of monies (new Farang to current Farang )is a seperate transaction. That transfer can occur out side Thailand

In the case of the OP I would suggest that this is the only  acceptable way. The money will be  in your own country.

 

[jvs]

Is the house in the company or does the OP own it?

big difference i would think.

 

[guest879]

you might as well walk away from it. I never met a western man who has won from a situation like this. I know a few who tried throwing away money on lawyers. also I don't understand why a man would use his wife as a nominee on their company.  I would say only an idiot buys a house in Thailand rather than a condo but I did it myself and we all know I am no idiot.

[Nanaplaza666]

What i understand is that the wife owns    51% and you need thai shareholders that own 48% and the farang only owns 1% when the house is company owned so i hope the reason of the deforce is not that you pissed of your wife . But i'm not sure thats just what i heard . I'm happy i dont "own" a house thats in a company name . 

[baansgr]

40 minutes ago, guest879 said:

you might as well walk away from it. I never met a western man who has won from a situation like this. I know a few who tried throwing away money on lawyers. also I don't understand why a man would use his wife as a nominee on their company.  I would say only an idiot buys a house in Thailand rather than a condo but I did it myself and we all know I am no idiot.

That's easier said than done as we have no idea of the value or Mikes financial situation.However my own experience  with lawyers is they are all thieve and liars,  asking for six figure retainers with no guarantee  of success.... And can be sure more payments  will be required at regular  intervals. 

[ross163103]

40 minutes ago, guest879 said:

you might as well walk away from it. I never met a western man who has won from a situation like this. I know a few who tried throwing away money on lawyers.

Sad to say, but I agree, it's a lost cause trying to fight the Thais. The odds are against you from the start, during, and after the battle. If you've got copious amounts of money to pay the right people you might have some success.....but if you have that much money you probably wouldn't be worried about one house.

[KittenKong]

2 hours ago, Delight said:

The way that I understand it when a Farang buys property via a company he will own max 49% of the company .The other 51% will be owned by Thais that he has never met. However it is constructed such that the Farang has 100% of the voting rights.

When the company is sold I assume that his 49% is transferred to the new Farang owner along with the 100% voting rights. To repeat this is my assumption. No doubt others can correct me. I am advised by friends that have sold companies that the cost to transfer is sub 10,000 Baht

Either way the 51% Thai owners do not get a pay day.The 48% of shares in your wifes name stay with the company.No pay day for her

The actual transfer of monies (new Farang to current Farang )is a seperate transaction. That transfer can occur out side Thailand

In the case of the OP I would suggest that this is the only  acceptable way. The money will be  in your own country.

 

This includes many assumptions that may not be applicable.

 

The Thai 51% can be held by any Thai: known or unknown. In this case the person seems to be known.

 

Whether consideration has been given to separate voting shares will depend on how good the lawyer was when the company was set up, and indeed whether such shares were deemed necessary at all. In this case it apparently didn't happen.

 

As far as the sale goes, you are assuming that the buyer will be interested in buying the existing company. This may not be the case. Thais might prefer to buy in their own name for whatever reason, and any buyer might consider it inadvisable to buy an unknown company here as by doing so you buy the liabilities as well as the assets, and these may not be fully known or disclosed.

 

Also, even if the company is sold rather than the asset, you are assuming that a suitably stupid farang buyer can be found who will pay the full asset value for just 49% of the shares, and who will pay this outside the country to boot.

 

My personal opinion is that company purchase here is a potential nightmare that offers few advantages. That's my opinion of relationships with Thais also.

[Delight]

49 minutes ago, KittenKong said:

This includes many assumptions that may not be applicable.

 

The Thai 51% can be held by any Thai: known or unknown. In this case the person seems to be known.

 

Whether consideration has been given to separate voting shares will depend on how good the lawyer was when the company was set up, and indeed whether such shares were deemed necessary at all. In this case it apparently didn't happen.

 

As far as the sale goes, you are assuming that the buyer will be interested in buying the existing company. This may not be the case. Thais might prefer to buy in their own name for whatever reason, and any buyer might consider it inadvisable to buy an unknown company here as by doing so you buy the liabilities as well as the assets, and these may not be fully known or disclosed.

 

Also, even if the company is sold rather than the asset, you are assuming that a suitably stupid farang buyer can be found who will pay the full asset value for just 49% of the shares, and who will pay this outside the country to boot.

 

My personal opinion is that company purchase here is a potential nightmare that offers few advantages. That's my opinion of relationships with Thais also.

 There are just 2 considerations in relation to my post

1) The OP has to have  100% voting rights  and

2) His wife cannot contact the other share owners. If she can do this -and crosses their palms with silver -then she will control 51%. In that circumstance she will control the company and thus the house.The OP loses potentially everything.

(Giving the wife 48% was a mistake by the OP)

Given these 2 details favour the OP then that is all that counts.

Many  companies -with houses- are bought and  sold on a  daily basis.

The buyers and the sellers do not see the nightmare that only you seem to see

[AlexRich]

Many on TVF bemoan the negativity of Thai Visa members when it comes to the pitfalls of Thailand, but this story highlights the real risks that are out there. Marriage, company formations, setting up businesses, etc are all no-no’s which carry too much risk as far as I’m concerned ... unless of course the sums involved are a tiny fraction of net worth.

 

Good luck to the OP, but I suspect that he’s going to have to give up 48%. The company is a separate legal entity, unconnected to his marriage, and the ownership is legally documented. 

[TerryLH]

4 hours ago, Delight said:

The other 51% will be owned by Thais that he has never met.

Its actually okay to know the persons before setting up a business.

[Delight]

21 minutes ago, AlexRich said:

 

 

Good luck to the OP, but I suspect that he’s going to have to give up 48%. The company is a separate legal entity, unconnected to his marriage, and the ownership is legally documented. 

 Who is she going to sell the share to?

[marqus12]

It reminds me of recent story from Phuket.

Grandpa set house on fire and then wanted to climb the windmill

and jump.Thai neighbor said to the reporter that such things happen

in this area often.

[KittenKong]

3 hours ago, Delight said:

Many  companies -with houses- are bought and  sold on a  daily basis.

The buyers and the sellers do not see the nightmare that only you seem to see

 

There are plenty of people on here who would disagree. The OP is probably one such.

[KittenKong]

2 hours ago, Delight said:

 Who is she going to sell the share to? 

It's not a question of her selling the share. She owns 48% of company and of its asset. If the asset is sold (or the whole company) then 48% of the sale price is hers by right.

[chickenslegs]

Seems to me that the OP has all the voting rights in the company, so his wife will not get any cash unless he sells the house (sells the company).

 

I think he should tell her that he is willing to stand by his (generous) promise to give her 25% of the value, but with the proviso that she is removed from the list of shareholders.

 

If she is not willing to accept his offer he should tell her that he will not sell the house, but rent it out, and she will get nothing.

 

 

[Delight]

10 minutes ago, KittenKong said:

It's not a question of her selling the share. She owns 48% of company and of its asset. If the asset is sold (or the whole company) then 48% of the sale price is hers by right.

 That cannot be right.  In the regular way companies (with their asset) are transferred to a new owner. The Thai 51% do not get a payday as there is no sale -just a transfer of the Farang shares and the voting rights to the new company M.D.

The Farang with the 100% control of voting rights agrees to this.

No money changes hands. There is simply a transaction cost for the legal services.

 

 

The balance of the other  shares remain in their same names. They are Thai held shares and cannot be owned by a Farang.

The 48% wife's shares  (Thai)stay where they are i.e in the company -as does the main asset -the property

The actual payment i.e  for the property- is not part of this process.This is organised seperately.

 

The biggest problem is that the Farang cannot get his money out of Thailand.

No official bill of sale . No evidence of where the money came from.

Thai banks will simply refuse to transfer.

Hence my suggestion to the OP that the monies are transferred to an account in his homeland. No Thai can touch that.

 

[manarak]

13 minutes ago, chickenslegs said:

Seems to me that the OP has all the voting rights in the company, so his wife will not get any cash unless he sells the house (sells the company).

 

I think he should tell her that he is willing to stand by his (generous) promise to give her 25% of the value, but with the proviso that she is removed from the list of shareholders.

 

If she is not willing to accept his offer he should tell her that he will not sell the house, but rent it out, and she will get nothing.

apparently, you don't know the difference between voting rights and property in a company.

 

OP has done what I always advised against: he involved his wife in a jurisdic person owning his personal wealth. huge pitfalls.

 

the transfer of the shares to the wife could be interpreted as a gift.

 

I'm unsure how a court would judge in this case, considering nominees are already dodgy.

 

Maybe there is one way how OP could eject the wife from the company, provided she doesn't have much cash on hand.

I guess the company's capital has not been liberated (i.e. paid in). So this step could now be undertaken, requiring the wife to pay in the nominal value of her 48%. if she can't, the shares will go back to the company AFAIK (but I don't know Thai rules on this). might be worth exploring with the lawyer.

[chickenslegs]

2 minutes ago, manarak said:

apparently, you don't know the difference between voting rights and property in a company.

 

OP has done what I always advised against: he involved his wife in a jurisdic person owning his personal wealth. huge pitfalls.

 

the transfer of the shares to the wife could be interpreted as a gift.

 

I'm unsure how a court would judge in this case, considering nominees are already dodgy.

 

Maybe there is one way how OP could eject the wife from the company, provided she doesn't have much cash on hand.

I guess the company's capital has not been liberated (i.e. paid in). So this step could now be undertaken, requiring the wife to pay in the nominal value of her 48%. if she can't, the shares will go back to the company AFAIK (but I don't know Thai rules on this). might be worth exploring with the lawyer.

My point is that she can not get her hands on any cash unless the OP agrees to sell the house - which seems like an advantage in any negotiations.

 

[Delight]

 The OP is remaining quiet as to :

1) His share allocation  and

2) Does he have 100% control of the voting rights.

Perhaps he could reveal all

[Delight]

53 minutes ago, Delight said:

 The OP is remaining quiet as to :

1) His share allocation  and

2) Does he have 100% control of the voting rights.

Perhaps he could reveal all

Apologise -you do specify 49% share allocation.

So just about the voting rights