Shares in a Thai company

[FriendlyFarang]

If somebody has shares in a Thai company (ltd), what does this actually mean? As a shareholder, am I entitled to anything like profits of the company?

[blackcab]

It means you own a percentage of the company. If you have ordinary shares you have a right to attend the Annual General Meeting and vote.

 

Depending on the percentage of shares you hold you may have other rights.

 

You will not receive profits of the company as that is not how companies work. You could receive a dividend if a dividend is authorised for all shareholders at the AGM.

 

It depends, but if you have a minor stake in a business then it is very easy to make sure you never receive any dividends should the majority shareholder(s) decide so.

 

All you could do is sell your shares to recoup your investment and hopefully some profit.

 

Crucially, it all depends on who the other shareholders are.

 

Perhaps if you do not yet fully understand how a company functions then maybe it might not be wise to invest at this stage.

[norbra]

The majority of companies listed on the Stock Exchange of Thailand (SET) pay regular dividends to shareholders.

You can find each companies financial profiles,which include the percentage of profits issued for each share,at set.co.th

[Liverpool Lou]

19 minutes ago, FriendlyFarang said:

If somebody has shares in a Thai company (ltd), what does this actually mean?

Private limited company or public (listed) company?

[FriendlyFarang]

I understand now that I should have given a bit more info, sorry for that.

The company is actually a one man company (private limited) of a friend, he transferred me some percent of the company (I didn't pay anything).

It's basically a one person company (with two other share holders on paper), the company is buying stuff, selling stuff, and the owner (majority share holder) transfers the profits to his bank account.

[FritsSikkink]

2 hours ago, FriendlyFarang said:

 and the owner (majority share holder) transfers the profits to his bank account.

So you paid nothing and he is moving company assets to his private account. You as a shareholder will be for a part accountable for debts. Good luck with your mates "free" shares. 

[FriendlyFarang]

13 minutes ago, FritsSikkink said:

So you paid nothing and he is moving company assets to his private account. You as a shareholder will be for a part accountable for debts. Good luck with your mates "free" shares. 

Isn't the point of having a limited company is that the shareholders are not liable for debts?

My question goes more in the direction of:

If the company is making for example 100k per month in profit, and the owner is transferring this to his personal bank account (would this then be booked as dividends?), am I then theoretically entitled to also receive a share of this, relative to the shares we each hold in the company?

[blackcab]

2 minutes ago, FriendlyFarang said:

Isn't the point of having a limited company is that the shareholders are not liable for debts?

My question goes more in the direction of:

If the company is making for example 100k per month in profit, and the owner is transferring this to his personal bank account (would this then be booked as dividends?), am I then theoretically entitled to also receive a share of this, relative to the shares we each hold in the company?

 

The profit could be being paid as a salary.

 

You are not entitled to a dividend unless it is agreed at the AGM.

 

Chances are your friend transferred a small percentage to you as there needs to be a minimum of 3 shareholders to create and maintain a Thai private limited company. 

[FriendlyFarang]

18 minutes ago, blackcab said:

The profit could be being paid as a salary.

 

You are not entitled to a dividend unless it is agreed at the AGM.

Considering that the company consists of my friend (Thai) as the majority share holder, his sister, and me, there won't be anything like this on the "AGM".

So to sum it up, the shares that are in my name have no real value, correct?

 

[blackcab]

27 minutes ago, FriendlyFarang said:

Considering that the company consists of my friend (Thai) as the majority share holder, his sister, and me, there won't be anything like this on the "AGM".

So to sum it up, the shares that are in my name have no real value, correct?

 

How many shares or what percentage of the company do you own?

 

What assets does the company have?

 

Without that information there is no way of knowing the answer.

 

However if (a) the company does not hold any real fixed assets such as land, buildings, vehicles, etc, and (b) you are a minority shareholder then the chances are the shares hold little real world value.

[FritsSikkink]

12 hours ago, FriendlyFarang said:

Isn't the point of having a limited company is that the shareholders are not liable for debts?

My question goes more in the direction of:

If the company is making for example 100k per month in profit, and the owner is transferring this to his personal bank account (would this then be booked as dividends?), am I then theoretically entitled to also receive a share of this, relative to the shares we each hold in the company?

I suggest your friend and you start using an accountant as you both have no clue how the financials of a company should work and could run into some serious tax issues.