I am selling my house in Company name.

[mikebell]

The buyer proposed that the purchase cheque is made payable to the Ltd company, there's no bank account open in this name. 

Any information as to a legitimate way round this would be greatly appreciated.  It must be acceptable legally to the buyer.

 

[blackcab]

1. Cash.

 

2. Ask your bank if they will deposit endorsed third party cheques.

 

When the purchaser obtains their bank cheque, ask them to not cross the cheque a/c payee only and to not cross out the words "Or Bearer".

 

Once you receive the uncrossed bank cheque the correct number of company directors needs to endorse the back of the cheque (sometimes twice). After this you should be able to deposit the bank cheque into your own account.

 

However you must discuss this with your bank first and you must follow their exact instructions, which may include the company directors being present and/or supplying copies of the company DBD, copies of director ID documents and potentially minutes of a company shareholder meeting authorising the actions. Your bank must understand the payee of the bank cheque is a limited company.

 

Both methods carry substantial risk for the purchaser and they may not be willing to do this.

 

The risk for you is that if your bank changes their mind and they decline to deposit an endorsed third party bank cheque then you will not be able to get your money.

 

Or you could open a company bank account. In some cases, if you want to be able to sign on the account you will need to show the bank your work permit when the account is set up.

[Swiss1960]

Simple solution: the contract has to state that the cashiers cheque has to be issued in the name of xxx yyyy, this name probably is equal to the name of the sole (or one of the) director. The contract is signed by the company's director(s), with company stamp, number of signatories depending on the company's terms and documents. 

This will give the buyer peace of mind, and it is not his concern anymore.

Edited August 17, 2021 by Swiss1960

[Delight]

 When you are selling a property that is owned by a Thai Company-as a Farang you can only sell that which you own i.e your share allocation and your voting rights. These are sold (transferred) for the price of the house.

If -as you say -your buyer does not have a bank account then this is strange.

 

Where is the money coming from?

 

How can he issue a cheque when he does not have a bank account?

 

Typically the seller will wish to see the money transferred to his account.

This is typically the first stage.There will be no invoice and no receipt.

With the money trasferred to a bank account of the sellers choice-the the rest of the procedure can take place.This typically takes place in an accountants office

 

It sounds like the buyer is a Thai.

I repeat -where is the money coming from?

 

p.s Is this the same transaction that you posted over a year ago?

[Antonymous]

1 hour ago, Delight said:

 When you are selling a property that is owned by a Thai Company-as a Farang you can only sell that which you own i.e your share allocation and your voting rights. These are sold (transferred) for the price of the house.

If -as you say -your buyer does not have a bank account then this is strange.

 

Where is the money coming from?

 

How can he issue a cheque when he does not have a bank account?

 

Typically the seller will wish to see the money transferred to his account.

This is typically the first stage.There will be no invoice and no receipt.

With the money trasferred to a bank account of the sellers choice-the the rest of the procedure can take place.This typically takes place in an accountants office

 

It sounds like the buyer is a Thai.

I repeat -where is the money coming from?

 

p.s Is this the same transaction that you posted over a year ago?

Of course the buyer has a bank account. It is the OP's company (the legal owner of the house) that doesn't have a bank account. I don't know how the OP managed to fulfill legal requirements (such as paying employees, maintaining a P&L account, balance sheet, audited annual accounts, etc) without a company bank account, but that's not the issue.

 

If the OP has shares in the company he could in theory sell those shares to the buyer for the price of the house. This would require the minutes of an extraordinary general meeting of the directors/other shareholders of the company to approve this transaction.

 

The buyer would then be saddled with being a shareholder of this shell company. The house would still be on the company balance sheet presumably.

 

If I was the (potential) buyer I wouldn't get involved in such a transaction on any account.

Edited August 17, 2021 by Antonymous

[Antonymous]

Alternatively, the OP's company can indeed sell the house to the buyer while he (the OP) continues to 'own' the company after the transaction. In that case the buyer would own the house outright. Perhaps that's what he wants to do? It is not stated by the OP.

 

And if that is the case, then he would want to pay the money into the company account and to receive proper receipts from the company (not from the OP personally) that the transaction is approved by the company.

 

The OP would have a problem doing that without a company bank account.

 

The OP would also then need to add the proceeds of the transaction to the company P&L, adjust the balance sheet (assets). If he wanted to close the company he'd have to pay the appropriate taxes, etc. None of that would be a burden on the buyer.

[Delight]

Just now, Antonymous said:

Of course the buyer has a bank account. It is the OP's company (the legal owner of the house) that doesn't have a bank account.

 

 

You are correct. I misread the statement by the OP

The buyer must pay into the private bank account of the OP.

Suspect  that the only reason why a typical Thai company -set up for this purpose-would need a bank account would be  to pay for the annual audit.

 

Maybe the company has never been audited.

 

The purchaser should have no say as to which bank account  will  receive the money.

Maybe the OP wishes it to be paid into a UK account.

 

I feel sure that the OP is not telling the full story.

 

 

[sampson]

On 8/17/2021 at 1:16 PM, Delight said:

You are correct. I misread the statement by the OP

The buyer must pay into the private bank account of the OP.

Suspect  that the only reason why a typical Thai company -set up for this purpose-would need a bank account would be  to pay for the annual audit.

 

Maybe the company has never been audited.

 

The purchaser should have no say as to which bank account  will  receive the money.

Maybe the OP wishes it to be paid into a UK account.

 

I feel sure that the OP is not telling the full story.

 

 

The buyer is purchasing the property from say XYZ Ltd not John Smith.  John Smith might own some of the shares in XYZ and indeed have put all the money into the business to buy the property, be the Director and the man in control, but he doesn't directly own the property.

 

Thus the buyer, likely on the advice of their lawyer, wants to pay the Ltd Co. directly to buy the property to ensure best practice, security and compliance.  It isn't a difficult concept to grasp.  

[malthebluff]

On 8/17/2021 at 2:43 PM, Delight said:

 When you are selling a property that is owned by a Thai Company-as a Farang you can only sell that which you own i.e your share allocation and your voting rights. These are sold (transferred) for the price of the house.

If -as you say -your buyer does not have a bank account then this is strange.

 

Where is the money coming from?

 

How can he issue a cheque when he does not have a bank account?

 

Typically the seller will wish to see the money transferred to his account.

This is typically the first stage.There will be no invoice and no receipt.

With the money trasferred to a bank account of the sellers choice-the the rest of the procedure can take place.This typically takes place in an accountants office

 

It sounds like the buyer is a Thai.

I repeat -where is the money coming from?

 

p.s Is this the same transaction that you posted over a year ago?

It's the buyer who wants to pay by cheque he has a bank account but wants to write the cheque out  to the limited company as only a company can buy a house here. 

That's how I read it 

[khunPer]

On 8/17/2021 at 5:04 AM, mikebell said:

Any information as to a legitimate way round this would be greatly appreciated.  It must be acceptable legally to the buyer.

When a Thai company limited sells property - or sells anything - the money shall be paid to the company, and be duly noted in the company's books. Business tax(es) need to be paid.

 

There is to my knowledge no legitimate way round it - only if there are registered debt/mortgage in the property, which need to be paid before transfer - a director or shareholder cannot legally receive the money when selling a house, which belongs to a company limited.

 

Normally a property owned by a shell Thai company limited is not sold, but the shares of the company are transferred, and payment of the shares is noted as "fulfilled", or only the foreign owner's share of shares and voting rights are sold, often for the agreed value of the property. No need to transfer the title deed, and no need to pay transfer fee and stamps, and no property sales tax implies; only capital gain tax applies for the shareholder(s) that sells shares.

 

Sounds like your buyer is a Thai national that don't need/want a company limited. In that case the company limited sells the house, the money goes into the company limited, which can pay dividends to it's shareholders, or the company can formally be closed, and after paying taxes and debitors it's assets can be distributed among it's shareholders.

 

This is one of the negative sides when using a shell company limited as property owner.

[ronster]

Sold my property that was in a company to a foreigner and basically we just transferred the company to him and removed me , my Thai wife and our nominees . We then paid lawyers fees and transfer tax I think it was . All done in lawyers office as they already done any paperwork that needed sorted at land office which was minimal as far as I know .

[Delight]

Just now, sampson said:

The buyer is purchasing the property from say XYZ Ltd not John Smith.  John Smith might own some of the shares in XYZ and indeed have put all the money into the business to buy the property, be the Director and the man in control, but he doesn't directly own the property.

 

Thus the buyer, likely on the advice of their lawyer, wants to pay the Ltd Co. directly to buy the property to ensure best practice, security and compliance.  It isn't a difficult concept to grasp.  

 The seller  -in such transactions -is not selling the property.

He is selling the company. This is typically  a change of ownership -foreigner to foreigner.

As I stated earlier the seller is selling that which he owns i.e his  share ownership and his voting rights

 

But then again maybe this is not what is happening.

Suspect that he is selling to a Thai-just the property

 

The Thai will not want the company -hence the request to make the cheque out to  the company

Suggest that the OP employs an accountant to open a bank account for the company.

If that went thru then the OP is stuck with the company. A company with no assets.

I hear it costs about 80,000 Baht to close a company.

So the cost of the transfer at the L.O. plus closing the company -makes the total exercise expensive

 

Alternative -try and find a foreign buyer.

 

'Selling' a company which owns a house is a cheap transaction-probably about 10,000 Baht total.

If the Thai obtains control of the company -and as a consequence the property-then any future sale of the 'company/property' will be cheap for this prospective Thai/foreign buyer.

 

As I recall the OP posted before. His then wife had about 47% of the share allocation. She was convinced that she was entitled to 47% of the net.

Assuming that the OP has 100% of the voting rights-then she is entitled to zero.

This applies if the entire company is being transferred

However if the house -as a seperate transaction -is sold -then she and the other share holders are entitled to their share  of the net.

Messy business.

I assume that the lady is still living there.

 

[Henryford]

er it's not YOUR house

[paddypower]

there is some really basic information missing from the OP. Without it, I would hesitate to offer any advice. Assuming he has filed company audited financial, tax returns and SBD filings, he mush have an capable accountant. He/she is the person to seek advice from, not here at Aseannow. My 25 years' experience in holding and/selling property in Thailand, is to have the company hold the land and have the house owned personally, to take advantage of the residency tax rules (assuming that they are applicable). Get professional advice, for heavens sake.