Company Condo Service Fees

[bodhi]

Hi All,

I'm hoping someone can give me some badly needed advice here, since I just received an email which is surprising to say the least. The company I purchased my condo from a few years back, and which registered my condo under a company, has now sent me this outrageous surprise bill for last year and this year. From what I suspect, it's a load of bunk. I never agreed to any yearly accounting fees for this company which owns my condo. What is this audit fee? Bookkeeping fee? Business tax? Advertising??? What the heck were they advertising in the newspaper? And a fine on top of that to boot for not paying last year when this is the first I ever heard of this. Can someone please confirm that this is a load of crock? We're talking almost 60,000 baht here. There is no way this can be legal, can it?

Here is part of the email I received:

"Herewith  are  details  for  the  current  bi-yearly  accounting  services  relating  to  your  company.

To avoid a fine from the taxation department please remit the total amount at your 

earliest convenience. You may settle the outstanding account by either paying cash

at our registered office where a receipt  will be issued immediately or, if you are overseas, please arrange a Bank Telegraphic Transfer.

For Our Professional Services Rendered:

1.  Audit  fee  2007-2008      16,000.-

2.  Bookkeeping  for  2008   9,300.-

3.  Specific  business  tax      886.-

4.  Fine  Delay                    10,000.-

5.  Advertising  on  the  newspaper     1,000.-

Total                37,186.

1. Audit fee 2009 8,000.-

2. Bookkeeping for 2009 9,300.-

3. Advertising on the newspaper 1,000.-

Total 18,300."

Please help... Any advice on how to respond to this is appreciated.

Edited January 2, 2010 by bodhi

[lingnoi34]

I think it's quite clear: a limited liability company must keep accounting records and those must be audited yearly by external auditors/CPA.

I guess the condo you bought could not be registered in your name because the farang quota was already full.

You will have these accounting/auditing costs every year!

LN

[steve891]

I have a 101 sq/m condo in Pattaya in company name, 7 yr old building, I pay 16000 Baht per year company fee's and 7500 Baht per year for maintance etc...thats all I pay...

[hhgz]

"I'm hoping someone can give me some badly needed advice here..."

1. A business has on-going costs

2. Next time, read everything you sign.

3. You can choose the accounting company.

[aussiebebe]

"From what I suspect, it's a load of bunk. I never agreed to any yearly accounting fees for this company which owns my condo."

The OP must have agreed to this, accountancy fees are standard, but it's unusual that the bill for this amount was sent in an email....I'd ask for at least a paper invoice.

The OP will have to settle this bill, preferably at the company office, then investigate changing the accountants.

[Crossy]

Looks to me like the normal maintenance costs for your company, somewhat over the top I suspect but required to keep you at least semi-legal.

Exactly why did you buy a condo using the company route, when you can own it outright? (provided it doesn't go over the 49% foreign ownership quota).

[bodhi]

So it would appear from what everyone is saying, is that these are standard company accounting fees. I find it hard to believe that the audit and bookkeeping fees are so extreme, especially since they are in Thailand. I don't argue the fact that companies have associated carrying costs. But this fees were not disclosed originally, and I'm only hearing of them now, by email, three years after move in date. But if others who have gone the company ownership route can confirm that these are valid fees, and appropriate amounts, then what can I say. I should have done my research, I guess.

I didn't choose to go the company ownership route. I made the mistake of assuming that it would be put in my name. Never assume. What they did was put it in the name for everyone who bought who requested it in their name, and even though I was the second person in the entire building to buy, I still got stuck with it in a company name. But too late now to argue, I guess. Do I have any options with this at this point now? I suspect not, although it doesn't hurt to ask.

[jbaldwin]

I pay 17,000 baht per year and other people I know all seem to pay 15,000-20,000 baht so if the invoiceis for three years of accounts and tax reporting then they seem normal.

As you were unaware of the ongoing cost I assume that you did not get a lawyer involved in the purchase. If the company structure was done properly you should have signed a large pile of documents - shareholder agreements, share transfer documents etc. These are very important for your protection. I suggest you get a lawyer involved now and check that all the documentation is in place.

[torrenova]

Quite used to small UK companies not needing any accounting input and annual costs being around £20 per company, I was surprised how much running a company costs in Thailand. I suspect a large amount of that cost is because your regular guy does not possess the skills whereas your regular Joe in the UK can add up, subtract and divide.

[jbaldwin]

Quite used to small UK companies not needing any accounting input and annual costs being around £20 per company, I was surprised how much running a company costs in Thailand. I suspect a large amount of that cost is because your regular guy does not possess the skills whereas your regular Joe in the UK can add up, subtract and divide.

The big difference is that all companies in Thailand are required to have an audit done. There are relatively few registered auditors and that all seem to impose minimum fees however simple the work is. Small UK comanpies have no audit requirement. The other thing is the tax forms required by the revenue department. When you sign the annual accounts and tax returns there is a lot of paperwork. Add to this some of the new measures to avoid the use of nominee companies eg you legally must hold an AGM, advertise in a newspaper the date of AGM etc.

[jbaldwin]

Bodhi

Just to add to my previous post. I see that they have ask you for payment but not a sign the accounts. This should be a big warning sign. Who was able to sign the company accounts? It is important that you the only person able to sign on behalf of the company otherwise the company could enter into any type of contract without your knowledge.

[bodhi]

JBaldwin,

Thanks for your input on this. I was hoping someone as knowledgeable as yourself would provide some much needed input. You've put my mind at ease on the fees, but you raise a worrying point on the fact that they haven't asked me to either sign a large number of documents during the initial company formation stage, nor yearly to sign the accounts. This I'll have to look into immediately.

I think, as you say, the best route is to hire a lawyer to go through everything to make sure it's all legit and on the level. I know I should have done this when I first bought the place, but I was busy at the time, and hindsight is golden as they say. I did get a lawyer to do a title deed search to make sure that the deed was in my name, but that's as much as I did. I guess I should get him to go to my condo owner and go through all the paperwork to ensure that it was all done right. Is this what you are suggesting I should do?

I know this question gets thrown around a lot on this board, and I've read a ton of recommendations, but since you seem to be so knowledgeable about all of this, do you have any recommendation for a good, trustworthy lawyer to use?

Thanks for everyone's input on this.

Cheers,

Bodhi

[briley]

If the condo is still below the 50% foreign ownership woldn't it be a good idea for your 'company' to sell the unit to you?

Very low cost in selling and buying until April.

Mind I have a friend who is having problems winding up his 'company' and is still paying for it each year.

[PattayaParent]

Seems like you've discovered one of the 'benefits' of circumventing the land laws in order to own a property that you are not really entitled to own?