Evaluating Market Demand

[Indo-Siam]

OK, gents - here is another solicitation of feedback.

From time to time, I get inquiries from people seeking to shut down their companies. I normally turn these away, as we have not previosuly been involved with such actions.

I don't know that much about the process - I know that 1) it takes a long time; 2) a series of Thai newspaper announcements are required, and 3) several audits are required.

What I am intrested in is:

1) Hearing from individuals who would be in need of such assistance, to shut down their Thai Company. Would you engage a competent service provider at a fee of 50,000 baht?

2) From people who have previously been through this process - who provided you with assistance of this sort, and what did they charge you?

Replies to: [email protected]

Thanks!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.indo-siam.com

[Sunbelt Asia]

Steve,

As you will find, it is easier to start a company up then closing it down!

The company must:

1.Hold a Board of Directors' meeting to adopt and approve liquidation of the company and to fix dates for two separate General Meetings of shareholders to consider this. Any of the directors or a person authorized by the directors may issue notices calling for such shareholders' meetings, unless required otherwise by the Articles of Association of the company.

2.General Meeting (first) of the shareholders is to adopt a special resolution to liquidate and dissolve the Thai company. A liquidator and an auditor will be appointed by the meeting for such purpose.

3.General Meeting (the second) of the shareholders will confirm the special resolution adopted in the first meeting. The second meeting must be not less than fourteen days and not more than six weeks from the date of the first meeting, unless stated by the Articles of Association of the company.

4.Place two successive advertisements in a local newspaper announcing the company liquidation to allow creditors (if any) to make a claim for debts owed to them by the company.

5.Send to all creditors a letter by registered mail requesting them to file a debt claims owed to them by the company.

6.File the relevant application documents together with copies of the special resolutions with the Company and Partnership Registration Office, Commercial Registration Department, Ministry of Commerce, within 14 days from the date of the second shareholders' meeting.

7.The appointed auditor must prepare and certify the financial statements (Balance Sheet and Accounts) as of the date of dissolution. The date of such financial statements must be the date of the second shareholders' meeting (i.e., the confirming meeting).

8.Hold a shareholders' meeting to approve the financial statements for submission to the Ministry of Commerce.

9.Submit a report of the liquidator every three months to the Ministry of Commerce. This obligation shall continue until completion of the liquidation process.

10.Once the liquidator has cleared the assets and liabilities and has called on debtors for payment of debts to the company, the liquidator must call a final meeting of the shareholders to approve the final liquidation of the company. The minutes of the meeting shall be submitted to the Ministry of Commerce within fourteen days from the date of the meeting.

11.Submit application to the Thai Revenue Department for liquidation of the company and return the original Value Added Tax Certificate and original Tax Identification Card in the name of the company.

12.When the Revenue Department grants approval, the liquidator shall notify and submit a copy of such approval to the Ministry of Commerce in order to obtain final approval from the Ministry.

13.The liquidator has the duty to deposit all the company's books of accounts with the Registrar's office, where they shall be kept for ten years counting from the date of final approval of the liquidation. (In practice, the Ministry does not keep the books of accounts. Instead, it asks the liquidator to keep the books and notify the Registrar of such fact by letter.)

We have charged 35,000 professional fees for this service in the past.

www.sunbeltasia.com

[yuyi]

I know of a guy who had to go back in an emergency, about 9 months ago, and therefore closed his company. It was registered, he had a work permit, but no revenues yet, due to delays in the export license formalities which he needed.

His Thai accountant (100% Thai, no farangs involved) asked for 10000 baht to close the company. I don't know the name but I know that he had ads in the bangkok post.

[Sunbelt Asia]

asked for 10000 baht to close the company

That is a SUPER rate if that is correct. Several auditors alone wanted 15,000 Baht just to do the audit on closing the company and the companies to be audited had no trading history.

Can't see how he could do it for 10,000 Baht? Our rates are low but that is loooooooooooooooooooooooowwwwwwwwwwwwwwww. Too bad you don't have his name. I like to give him a call and see what they do for 10k.

I wonder if they do these steps or let the Thai government close it for no activity after 3-5 years and just file the tax returns of zero income, expense. Interesting how he could do it!

www.sunbeltasia.com

[yuyi]

asked for 10000 baht to close the company

That is a SUPER rate if that is correct. Several auditors alone wanted 15,000 Baht just to do the audit on closing the company and the companies to be audited had no trading history.

Can't see how he could do it for 10,000 Baht? Our rates are low but that is loooooooooooooooooooooooowwwwwwwwwwwwwwww. Too bad you don't have his name. I like to give him a call and see what they do for 10k.

I wonder if they do these steps or let the Thai government close it for no activity after 3-5 years and just file the tax returns of zero income, expense. Interesting how he could do it!

www.sunbeltasia.com

<{POST_SNAPBACK}>

Yes, Greg, indeed, your prices are not bad, and I don't think this guy is real competition.

Let me see what I remember. Keep in mind this is all indirect information, I never spoke to the guy, all I know is what I got told when I spoke with the other guy, a farang from Greece, who was his customer:

This guy is an accountant who does in general seem to have extremely cheap prices. Therefore he has always big problems to keep his company going. He's just too nice to dare to ask for money. He used to have ads in the Bangkok post, and I think his name is Suraphon, or similar. His office is in the Chan Issara Tower near Silom road. Hmmm, now it comes back, he is an accountant, not a lawyer, and that is also in his company name, something with the English words "book keeping" in it. He tries to do all 100% correct, and is a little scared of authorities. That's about all I know, sorry, I do not have a phonenumber.

I have no idea how he did close the company, but I assume it was the easiest way possible. There was no income, and almost no expenses anyway, and the farang owner did leave Thailand, probably without intention of coming back.

(Greg, I thought you go to the Conrad today?)

[Sunbelt Asia]

Thanks

Greg, I thought you go to the Conrad today?)

Yes I was there :-) So was Khun Steve from Indo-Siam.

Not much new, except the Australian FTA and how an Australian can own 60% of the shares of a private limited company starting Jan 1st 2005.

www.sunbeltasia.com

[Sulaphat]

Some time back I looked into this topic because of a potential investment that I and some colleagues were looking to make. One investment scenario we considered was to consolidate the assets of two existing companies into one and then close one of them. Without going into details, the investment never materialized for other reasons, but I recall that a lawyer's advice was that closing a company was time consuming and expensive. I think they estimated between baht 300k and 500k depending upon how much trading the company had done. Was this a reasonable estimate, or were they being excessively pessimistic?