Buying/selling a company under new FBA rules.

Situation: Farang is 49% shareholder and MD in an old company with a broad range of trading articles. No land or property is owned, all shops are leased. 7 Thai non voting silent shareholders. He intends closing his shops and says he can sell his company (ie his 49%) silently (ie just sign a share transfer form and the shares are yours!!!) to another Farang for 1.5M Baht as this is half the new capitalisation requirement. He says this is entirely legal and has heard of a number of Pataya companies doing this.

This seems too simple to be true, is it?

Buying/selling a company under new FBA rules.

Situation: Farang is 49% shareholder and MD in an old company with a broad range of trading articles. No land or property is owned, all shops are leased. 7 Thai non voting silent shareholders. He intends closing his shops and says he can sell his company (ie his 49%) silently (ie just sign a share transfer form and the shares are yours!!!) to another Farang for 1.5M Baht as this is half the new capitalisation requirement. He says this is entirely legal and has heard of a number of Pataya companies doing this.

This seems too simple to be true, is it?

A share transfer of shares is this simple. However you better be sure what you are walking into, civil and criminal liabilities can be part of what you inherit with being the Director as well. Sure lots of indemnification clauses are put in for anything that took place before the business was acquired, but it does not fully protect you, if you are the new director and are in the hot seat.

Because of this, 95% of all businesses are acquired with an asset purchase, not a share purchase agreement.

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