Have I Made A Mistake?

[m155g0ld]

Hi Guys,

I am looking for some advice.

A friend of mine is in the process of setting up a new company here in Bangkok and he needed 7 farang to sign to say they would be a 1% shareholder of the company with no voting rights. My friend asked if I would mind doing this and I agreed and also gave him a copy of my passport.

My fiance thinks that if the company is ever investigated then it will become apparent that I never put any money into the company and therefore I will be somehow liable.

Can anyone please advise me whether my fiance is right and whether by doing this I have put myself at risk in any way.

Many Thanks in advance,

L

[smartecosse]

anyway is it too late to change your mind if you advice saying that its not a good idea?

Edited April 12, 2007 by smartecosse

[m155g0ld]

Hopefully, if it does turn out that I have put myself at risk in some way, I can call him today and tell him I've changed my mind and to take me off the shareholders list.

However, if it turns out that it is perfectly OK for me to have done this then of course I want to help him in this way and will happily leave it as it is.

[Clipped]

you are now liable for 1% of any damages or debts his company may come into.

you need to clarify that 1% contribution as being financial, material, or providing expertise...this way it will limit your liability.

[m155g0ld]

OK guys, I have just called my friend and he has taken me off the list of shareholders.

I just don't feel I want to risk anything that could potentially cost me money I don't have or jeopardise my living in Thailand in any way.

Thanks for the quick replies

[brianinbangkok]

OK guys, I have just called my friend and he has taken me off the list of shareholders.

I just don't feel I want to risk anything that could potentially cost me money I don't have or jeopardise my living in Thailand in any way.

Thanks for the quick replies

I wonder why he needed 7 foreigners in the first place , never heard of that before !

Only heard of foreigners needing 7 Thai citizens holding a few shares each so the company can own land and house and that was in the legal gray zone.....

Edited April 15, 2007 by brianinbangkok

[Maestro]

I wonder why he needed 7 foreigners in the first place , never heard of that before !

Only heard of foreigners needing 7 Thai citizens holding a few shares each so the company can own land and house and that was in the legal gray zone...

It is about a company needing at least 7 shareholders, regardless of nationality. Many types of business can have all foreign shareholders.

--

Maestro

[Maizefarmer]

Hi Guys,

I am looking for some advice.

A friend of mine is in the process of setting up a new company here in Bangkok and he needed 7 farang to sign to say they would be a 1% shareholder of the company with no voting rights. My friend asked if I would mind doing this and I agreed and also gave him a copy of my passport.

My fiance thinks that if the company is ever investigated then it will become apparent that I never put any money into the company and therefore I will be somehow liable.

Can anyone please advise me whether my fiance is right and whether by doing this I have put myself at risk in any way.

Many Thanks in advance,

L

Some comments in reply to your question:

1) Shareholding does not assign legal liability in Thai company law - it is the directors who carry liability.I stand to be corrected but I am sure that this is correct. Something has to go seriously wrong before the shareholders get pulled in for questioning - and that would almost certainly be a criminal matter (and I trust you know your friend well enough to understand what the company will be doing)

2) If someone wishes to "give" you a shareholding in a company, they are quite legally entitled to - nothing wrong with that.

Now where you potentially could come unstuck in real terms is if you had invested money to get your shareholding, and things then went pear shaped - you would then potentialy have lost your money.

So have you made a mistake - well, no - for all practical purposes I can't see where you have lost or stand to loose anything. There is nothing unusual in what you have done - go do a company search - you'll see this practise repeated time and time again in Thailand.

... in any case, you are also at liberty to resign at anytime as a shareholder - with or without the directors consent, so if you are so concerned - just file the required paperwork to register your resignation as a shareholder.

Edited April 17, 2007 by Maizefarmer

[Naam]

I wonder why he needed 7 foreigners in the first place , never heard of that before !

Only heard of foreigners needing 7 Thai citizens holding a few shares each so the company can own land and house and that was in the legal gray zone...

It is about a company needing at least 7 shareholders, regardless of nationality. Many types of business can have all foreign shareholders.

--

Maestro

please elaborate what kind of business/thai company can have foreign shareholders only.