Payment of Share Capital

[Thai Botanist]

Dear All,

 

I'm the director and shareholder of of a small Thai Limited Company. We have a current registered capital value of 1 million THB, but are going to raise this to 2 million THB. The initial 1 million THB was paid into our company account (over the first year of trading - after the first payment of 25% of initial registered capital value).

 

However, I'm looking for advice on how to ensure that we correctly record the payment of share capital (for any future audit, or other requirements).   I've ready this notice here from Mazars -  https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Legal/Payment-of-Share-Capital   - which suggests that we need to carefully note the "issue a resolution to call the additional payment of share capital to support the company’s operations"  and that shareholders need to be given this within a specific notice period.

 

We're slowly growing, and expect to continue to grow over the next year or two, and just want to be sure that when we pay share capital into the company, that we do this in the correct way.

 

If I recall correctly (although I may be wrong), we cannot actually issue 'printed' share certificates to any shareholder until all share capital is paid up. Is this correct?

 

And lastly, I'm generally aware that directors of the company may be liable for the total unpaid shared capital, in the even the company incurs any financial liability that it is unable to pay - correct?

 

Any advice or suggestions related to share capital would be greatly appreciated.

[maisodni]

For most Thai private companies, the issuance of "share certificates" is pretty much optional.  Most Thai companies probably do not issue share certificates - because there is no particular Thai government interest in such papers.  What the Thai government DOES care about is the current shareholder listing form - known as the form Bor Or Jor 5  (BOJ.5).  It lists all shareholders by name, listing also the numbered shares owned by each shareholder - by quantity, type of shares (ordinary or preferred), par value of each share, and the actual share registration numbers of all shares owned by each shareholder.

 

Thus - let's say there are three shareholders - who initially collectively owned 10,000 shares, each share with a par value of 100 baht.  One shareholder owned 49% of shares, one owned 50%, and one owned 1% of shares.  So - the initial  BOJ.5 would list shareholders like this:

 

                                                 Quantity                        Share Registration               Date on Which Shares

     Name           Citizenship       Of Shares                            Numbers                              Were Issued

 

1   Ms. A B C     Thai citizen      100 shares          1 %     Shares  No.   00001 - 00100              13 Dec 2562

 

2.  Mr. D E F      Thai citizen    5,000 shares        50%      Shares  No.   00101 - 05100            13 Dec 2562

 

3.  Mr. G H J      UK Citizen      4,900 shares         49%     Shares No.    05101 - 10000            13 Dec 2562

 

Each of those lines would also have a date of when those shares were issued (equaling the date on which that share capital was paid up).

 

If you later issued shares for another 1,000,000 baht in capital, TO THE SAME SHAREHOLDERS, with THE SAME CUMULATIVE SHARE PERCENTAGES RETAINED, a new BOJ.5 would be issued.  It would look like this:

 

                                                  Quantity                        Share Registration             Date on Which Shares

     Name           Citizenship       Of Shares                            Numbers                            Were Issued

 

1   Ms. A B C     Thai citizen      100 shares          1 %     Shares  No.  00001 - 00100           13 Dec 2562

                                             100 shares                    Shares  No.   10001 - 10100           13 Feb 2563 

 

2.  Mr. D E F      Thai citizen    5,000 shares        50%      Shares  No.   00101 - 05100           13 Dec 2562

                                             5,000 shares                    Shares  No.   10101 - 15100            13 Feb 2563    

 

3.  Mr. G H J      UK Citizen      4,900 shares         49%    Shares No.    05101 - 10000            13 Dec 2562

                                             4,900 shares                  Shares  No.    15101 -  20000            13 Feb 2563 

 

As long as  the company is not a BOI-sponsored company, then until total value of capital registration reaches 5,000,000 baht, no evidence of capital pay-in is required to be shown to the Thai government.  And - up to that point - there is no requirement that company even has a corporate bank account.

 

Best regards,

Steve

https://www.thaistartup.com

 

[Thai Botanist]

@maisodni - thanks very much for the detailed reply Steve. Much appreciated and very helpful to know.