Legal Question About Properties

[givenall]

I have a legal question from TV and I hope I can a reasonable answer.

1, I have a business with my Thai Partner and per law my partner owns 51% and I own 49%. Question is according to Thai law what would happen if either one of die?

2, can we write a legal paper to leave the business and the assets to each other if one dies?

[Maizefarmer]

Let me understand this correctly - you hold 49%, and the company is structered so that the other 51% shareholding is held by a single person (a Thai national?)?

[givenall]

Let me understand this correctly - you hold 49%, and the company is structered so that the other 51% shareholding is held by a single person (a Thai national?)?

Actually two other thai national. On only has 3% and the other has 48% total of 51%

[Maizefarmer]

Let me understand this correctly - you hold 49%, and the company is structered so that the other 51% shareholding is held by a single person (a Thai national?)?

Actually two other thai national. On only has 3% and the other has 48% total of 51%

Givenall - thanks for the clarification - it's important, but the point aside for the timebeing, note that shares are considered assets - personal assets when in the name of a juristic person/individual ect ect ..... or company assets, if the shareholder has the shares registered in the name of another company he may own or be a sharehoder of.

With that in mind (i.e. the defineation of shares as an "assets"), what kicks into play upon the individuals death is their Last Will & Testament ... and I don;t think all that needs explaing, however - there are 2 Issues which you are going to have to look into and take professional legal advice on - I am not a lawyer (I'm a dairy farmer!!), and I can only comment against the background of a very similar experience a few years back, and secondly, against the background of my understanding of the subject - so read through my comments, take them for what you think them worth - in principal I believe them fairly accurately reflect the situation [you will be in], and to cover the points that you should give consideration to - but do follw them up with professional legal advice, which I am not qualified to give.

ISSUE(s) 1

1) with respect to your specifica question - yes, you guys can draw a document/agreement up. Keep in mind though that it has nothing to do with the company per say - it would be a private agreement between you and the deceased.

2) for it to be legally binding it will have to satisfy all the rules & regs that pertain to distrabution of assets upon death ... and I do not know what those rules and regs are, you are best advised to take advice form an estate type lawyer for that.

3) heres the important part: if you guys do draw up any agreement, ensure that:

- it is up to date.

- that any wish laid out in the deceaseds Last Will & Testament will have precedence over any seperately entered into agreement - so ensure that if their is a seperate doc drawn up, what it contains with respect to any agreement between you guys, is consistant with what is laid out in the LW&T.

There remains one outstanding consideration here Givenall: what if there is no final will & testament, and there is no executor?

In the case where assets do not amount to much such matters are usualy deal't with informaly, and little problem arises, but if assets (in this case the shares and there value) are substantial, and you wish to secure your interest, backed up by the agreement that you guys entered into - then, if I was you in such a situation, I would make haste (with my appointed legal council in tow) down to the Law Courts, and ask the "beak" (it's an old English colloquil term for a judge) to appoint an estate executor - and I'd make sure that the agreement you guys signed up to, is top of the pile of documents he is given , and which he will take into consideration when assessing and distributing the assets.

What if there is both a LW&T as well as seperate agreement, and what if the LW&T says "you get nothing", but the agreement says "all yours"? - and the answer is, I simply don't know - except to say, in ending these few notes off.

1) shares are assets and will be treated as such (i.e. part of the personal estate) in any LW&T

2) LW&T's tend to carry precedence over any [other] agreement - it would almost certainly be the claimants duty/obligation to demonstrate to the court otherwsie if they wanted any agreement to carry precendence over a LW&T.

ISSUE 2(s)

Rules & Regs pertaining to foreign national shareholding in a Thai reg'd company - you are not by chance an American citizen? If you are I suggest you study the shareholding regs as they relate to The Treaty of Amity - under which rules & reg's, subject to conditions &requirments, a USA citizen can be a majoirty shareholder in a Thai company - but don't take my word for it i.e. while in principal that is correct, it really is a specialist area and you will best off taking specialist advise.

...... so, how can a sharholder leave you shares if those shares take you over the permitted 49%/51% shareholding limitations? Good question, and while I don;t know the exact answer, and why you willneed to take professional legal advise, in principal I know it can be done - and done with the agrement of the courts. I don;t have experience of this sort of situation with respect to shares, but I have this experience with respect to a house and the land on which it stood. In short I lent a sum of money to a 3rd party, and secured that money against their house and land. To ensure that such an agreement was allowed, bearing in mind that as a foreign national there are all sorts of rules & regs related to foreigners and owning land (in short - we can;t) my legal man went to court to see if he could get the court to agree to such an arrangement. As was expected, the judge said - yes, no prob's, an allowed "a charge" to be registered against the house & land, on the district property register

In due course, as was expected the debtor defaulted and I sent my lawyer back to court to get a pocession order - which he got. The pocession order laid out just one stipulation: that I was permitted to sell the "asset" at market value, but that any sum of money received through the sale, which was over and above the amount in the original laon, plus interest, had to be returned to the debtor. That was fine by me, and in due ourse the house was sold - I got my money (plus interest) back, and the debtor got some cash.

How does this tie in with your situation?

In principal it's much the same - I would think yes, you could be legally left the shares, even if this temporily took you over the max 49% shareholding limit, but the court would want you to take whatever action was appropriate to bring things back in line with the law e.g. sell the shares, restructure the company and/or it's shareholding, or whatever else may have to be done ... and woul dgive you reasonable time to do so.

Do I know this for a fact? No - I don;t, but againstthe background of my experience with the house & land, to me the principal is much the same and I am sure that faced with the scenario of been left shares that took your shareholding over and above the 49% max limit, the courts would grant you the oppurtunity to restructure or sell, or do whatever was required i.e. I doubt very much you would be penalised for breaing some or other rule/reg related to shareholding, orhave the shares confiscated.

Thats my take on the situation - but whatever you do, do get professional legal advice

[givenall]

Let me understand this correctly - you hold 49%, and the company is structered so that the other 51% shareholding is held by a single person (a Thai national?)?

Actually two other thai national. On only has 3% and the other has 48% total of 51%

Givenall - thanks for the clarification - it's important, but the point aside for the timebeing, note that shares are considered assets - personal assets when in the name of a juristic person/individual ect ect ..... or company assets, if the shareholder has the shares registered in the name of another company he may own or be a sharehoder of.

With that in mind (i.e. the defineation of shares as an "assets"), what kicks into play upon the individuals death is their Last Will & Testament ... and I don;t think all that needs explaing, however - there are 2 Issues which you are going to have to look into and take professional legal advice on - I am not a lawyer (I'm a dairy farmer!!), and I can only comment against the background of a very similar experience a few years back, and secondly, against the background of my understanding of the subject - so read through my comments, take them for what you think them worth - in principal I believe them fairly accurately reflect the situation [you will be in], and to cover the points that you should give consideration to - but do follw them up with professional legal advice, which I am not qualified to give.

ISSUE(s) 1

1) with respect to your specifica question - yes, you guys can draw a document/agreement up. Keep in mind though that it has nothing to do with the company per say - it would be a private agreement between you and the deceased.

2) for it to be legally binding it will have to satisfy all the rules & regs that pertain to distrabution of assets upon death ... and I do not know what those rules and regs are, you are best advised to take advice form an estate type lawyer for that.

3) heres the important part: if you guys do draw up any agreement, ensure that:

- it is up to date.

- that any wish laid out in the deceaseds Last Will & Testament will have precedence over any seperately entered into agreement - so ensure that if their is a seperate doc drawn up, what it contains with respect to any agreement between you guys, is consistant with what is laid out in the LW&T.

There remains one outstanding consideration here Givenall: what if there is no final will & testament, and there is no executor?

In the case where assets do not amount to much such matters are usualy deal't with informaly, and little problem arises, but if assets (in this case the shares and there value) are substantial, and you wish to secure your interest, backed up by the agreement that you guys entered into - then, if I was you in such a situation, I would make haste (with my appointed legal council in tow) down to the Law Courts, and ask the "beak" (it's an old English colloquil term for a judge) to appoint an estate executor - and I'd make sure that the agreement you guys signed up to, is top of the pile of documents he is given , and which he will take into consideration when assessing and distributing the assets.

What if there is both a LW&T as well as seperate agreement, and what if the LW&T says "you get nothing", but the agreement says "all yours"? - and the answer is, I simply don't know - except to say, in ending these few notes off.

1) shares are assets and will be treated as such (i.e. part of the personal estate) in any LW&T

2) LW&T's tend to carry precedence over any [other] agreement - it would almost certainly be the claimants duty/obligation to demonstrate to the court otherwsie if they wanted any agreement to carry precendence over a LW&T.

ISSUE 2(s)

Rules & Regs pertaining to foreign national shareholding in a Thai reg'd company - you are not by chance an American citizen? If you are I suggest you study the shareholding regs as they relate to The Treaty of Amity - under which rules & reg's, subject to conditions &requirments, a USA citizen can be a majoirty shareholder in a Thai company - but don't take my word for it i.e. while in principal that is correct, it really is a specialist area and you will best off taking specialist advise.

...... so, how can a sharholder leave you shares if those shares take you over the permitted 49%/51% shareholding limitations? Good question, and while I don;t know the exact answer, and why you willneed to take professional legal advise, in principal I know it can be done - and done with the agrement of the courts. I don;t have experience of this sort of situation with respect to shares, but I have this experience with respect to a house and the land on which it stood. In short I lent a sum of money to a 3rd party, and secured that money against their house and land. To ensure that such an agreement was allowed, bearing in mind that as a foreign national there are all sorts of rules & regs related to foreigners and owning land (in short - we can;t) my legal man went to court to see if he could get the court to agree to such an arrangement. As was expected, the judge said - yes, no prob's, an allowed "a charge" to be registered against the house & land, on the district property register

In due course, as was expected the debtor defaulted and I sent my lawyer back to court to get a pocession order - which he got. The pocession order laid out just one stipulation: that I was permitted to sell the "asset" at market value, but that any sum of money received through the sale, which was over and above the amount in the original laon, plus interest, had to be returned to the debtor. That was fine by me, and in due ourse the house was sold - I got my money (plus interest) back, and the debtor got some cash.

How does this tie in with your situation?

In principal it's much the same - I would think yes, you could be legally left the shares, even if this temporily took you over the max 49% shareholding limit, but the court would want you to take whatever action was appropriate to bring things back in line with the law e.g. sell the shares, restructure the company and/or it's shareholding, or whatever else may have to be done ... and woul dgive you reasonable time to do so.

Do I know this for a fact? No - I don;t, but againstthe background of my experience with the house & land, to me the principal is much the same and I am sure that faced with the scenario of been left shares that took your shareholding over and above the 49% max limit, the courts would grant you the oppurtunity to restructure or sell, or do whatever was required i.e. I doubt very much you would be penalised for breaing some or other rule/reg related to shareholding, orhave the shares confiscated.

Thats my take on the situation - but whatever you do, do get professional legal advice

Maizefarmer,

Thank for taking time and analyzing this issue. I have learned a lot and yes I will ag ahead and talk to lawyer for legal advice.

Yes I am an American and I will look into the fact I can own more than 50% too

Thanks again