Spreaders of Conspiracy Theories: Unmasking the Motivations Behind the Lies

[bapak]

Ih have 3 different answers from 3 different "accountants"...

Situation is this..

I own 49% of a Co., Ltd.

Other 2 shareholders, one with 49% and one with 2%.

None of us have actually put any cash to purchase the shares.

Company started with loans from the shareholders, and now self supporting. All loans repaid.

Question... I want to transfer my shares to another party. Can this be done without the consent of the other shareholders?

Reason for transfer is just that I am getting old and want to take care of such things whilst able.

[clinique]

as with any shares they belong to you,,

you may dispose of them as you see fit..

however in private companies it is normal 'coutesy' to inform the other shareholders especial;ly if you hold a significant portion (which you do).. would you like it if someone in your company sold their shares to someone you didnt know ??

also it depends on what you 'deal' or agreementis with your other shareholders ??

if the other shareholders are tHAI, assuming they are ,, you dont want to 'annoy' anyone unessesarily..

perhaps the other shareholders would take them off your hands or even buy the shares ??

[CDB]

In most private companies, there are preemptive rights for shareholders. That is, you can't sell shares to a third party without offering them to the existing shareholders first in proportion to their shareholdings.

In Thailand, as I recall, this is not the case by default (as it is under company law in most countries). So you should check your articles of association and other company set up documents. It would be somewhat unusual to not have such a provision.

If there is a restriction on such a sale, you will need existing shareholders to sign a waiver of preemptive rights.

CDB

[bapak]

In most private companies, there are preemptive rights for shareholders. That is, you can't sell shares to a third party without offering them to the existing shareholders first in proportion to their shareholdings.

In Thailand, as I recall, this is not the case by default (as it is under company law in most countries). So you should check your articles of association and other company set up documents. It would be somewhat unusual to not have such a provision.

If there is a restriction on such a sale, you will need existing shareholders to sign a waiver of preemptive rights.

CDB

Gentlemen.... if I may go one step further, I said above: "None of us have actually put any cash to purchase the shares".

If I or the person I transfer the shares to, decide to fully pay up my shares, can I force the other shareholders to do the same? And if they do not, what is the consequences?

[bapak]

Sorry.. Duplicate

Edited April 8, 2010 by bapak

[clinique]

Sorry.. Duplicate

comes back to your articles of association,, normally such a 'call' would require a shareholder resolution , which means in most cases either simple majority of 51% or other cases maybe up to 75% to reach agreement...

paid or unpaid,, the previous posts advise yuo normally 'need' shareholder consent to transfer in a private company..

[bapak]

Sorry.. Duplicate

comes back to your articles of association,, normally such a 'call' would require a shareholder resolution , which means in most cases either simple majority of 51% or other cases maybe up to 75% to reach agreement...

paid or unpaid,, the previous posts advise yuo normally 'need' shareholder consent to transfer in a private company..

I hear what you say, but surely there must be some requirement for at least some initial payment be made for the shares.

[clinique]

Sorry.. Duplicate

comes back to your articles of association,, normally such a 'call' would require a shareholder resolution , which means in most cases either simple majority of 51% or other cases maybe up to 75% to reach agreement...

paid or unpaid,, the previous posts advise yuo normally 'need' shareholder consent to transfer in a private company..

I hear what you say, but surely there must be some requirement for at least some initial payment be made for the shares.

sorry you need to clearly explain your question more ??

do you mean paid by you already or should be paid by the person you are transfering to..???

[bapak]

Sorry.. Duplicate

comes back to your articles of association,, normally such a 'call' would require a shareholder resolution , which means in most cases either simple majority of 51% or other cases maybe up to 75% to reach agreement...

paid or unpaid,, the previous posts advise yuo normally 'need' shareholder consent to transfer in a private company..

I hear what you say, but surely there must be some requirement for at least some initial payment be made for the shares.

sorry you need to clearly explain your question more ??

do you mean paid by you already or should be paid by the person you are transfering to..???

n

What I said at the start was none of the shareholders have paid 1 Baht for their shares. General question... surely at some stage shareholders will be required to pay to the company some $$ for their shares.

[fletchsmile]

As you're a foreigner your company should probably have had THB 2mio baht capital to start so you could get your work permit. Of that 25% should have been paid up as a minimum to comply with the law.

One way that people get around the 25% is to put the money in, and then loan it back to the shareholders, so you get your cash back. I'm not sure if that is what you are saying you've done as you say you "loaned to" the company not "from". Loaning the cash back to yourself can be seen as complying with the law, although not necessarily the spirit of the law. The loan should then accrue interest, although there's no requirement to actually pay it, just keep accruing it. It is important that the cash actually is seen entering the company bank account before the loan back to you.

Unless the 25% was paid in, what you are doing is illegal. You wouldn't be the first though. If the other 2 are Thais and not really involved in any way nor provided any cash, they are also viewed as nominees which is another illegality.

If that's the case, you're suspicions are right. Do the honourable thing and sort out your shareholding mess first. This is best done by discussing the way forward with the other shareholders. Otherwise whatever you want to do, they can cause you serious problems. If Thai they may have contacts and exit routes to leave you carrying the can for the problems, even though you've all done the same thing together.

Not surprising you got different answers. Some will try and right any wrongs. Some will build wrong on wrong, and others haven't got a clue but give an opinion anyway

Edited April 9, 2010 by fletchsmile

[bapak]

As you're a foreigner your company should probably have had THB 2mio baht capital to start so you could get your work permit. Of that 25% should have been paid up as a minimum to comply with the law.

One way that people get around the 25% is to put the money in, and then loan it back to the shareholders, so you get your cash back. I'm not sure if that is what you are saying you've done as you say you "loaned to" the company not "from". Loaning the cash back to yourself can be seen as complying with the law, although not necessarily the spirit of the law. The loan should then accrue interest, although there's no requirement to actually pay it, just keep accruing it. It is important that the cash actually is seen entering the company bank account before the loan back to you.

Unless the 25% was paid in, what you are doing is illegal. You wouldn't be the first though. If the other 2 are Thais and not really involved in any way nor provided any cash, they are also viewed as nominees which is another illegality.

If that's the case, you're suspicions are right. Do the honourable thing and sort out your shareholding mess first. This is best done by discussing the way forward with the other shareholders. Otherwise whatever you want to do, they can cause you serious problems. If Thai they may have contacts and exit routes to leave you carrying the can for the problems, even though you've all done the same thing together.

Not surprising you got different answers. Some will try and right any wrongs. Some will build wrong on wrong, and others haven't got a clue but give an opinion anyway

Thank you. Good worthwhile info.

[fletchsmile]

Bapak,

Should you be having issues with one of the directors and someone not paying the shares the following link may be of interest. It's a duty of directors to ensure that share capital is paid up.Basically a shareholder with 5% upwards can take action against if that is not happening. Hence no need to necessarily sell 49% - only 5% would suffice if this is part of your aims. Hope you got my response to you PM as well.

http://www.bia.co.th/chapter5.pdf

Edited April 16, 2010 by fletchsmile