Liability And 49% Property-owning Company

[fxm88]

Hey All! I've read about how many farang "own" property using limited liability companies where a majority of ownership is held by non-voting Thai nationals. But what exactly are the limits of liability in this limited liability company? For example, suppose that someone goes onto the property and injures herself. Who is liable? Also suppose that any insurance policies have lapsed.

In some [western] countries the owners of the property can be subject to lawsuits and held financially responsible. What about Thailand? Are the owners of the company "jointly and singly" liable (i.e. together as a group AND each owner individually)? What if the farang owner is out of the country? Can the Thai owners be held liable?

Can the property become subject to seizure? How is the value of that property determined: the "book value" (i.e. the price it was bought at)? or perhaps a value reflecting a possibly lower market price? or what? What if buyers are hard to find?

Now suppose that value of the property is less than the damages? Since the farang owner is absent can the Thai owners be forced to make up the difference? And if they claim not to have any money but it could be shown that they are owners of other similar property holding companies could those companies and/or properties also be subject to seizure?

In some countries "personal primary residences" are afforded special protection, e.g. in bankruptcy cases. What about Thailand? And can property owned by a company be considered a "personal primary residence"?

Thanks!

[Sumitr Man]

As a very broad generalisation, the system/facts you are talking of is under "common law". Thailand adopts a "civil law" system. As such, although not wholly the case, it is extremely unlikely you could win a tort case based on the facts set out in your post.

Now, if a contractual relationship existed - things could be different.

[Dragonman]

As a very broad generalisation, the system/facts you are talking of is under "common law".  Thailand adopts a "civil law" system.  As such, although not wholly the case, it is extremely unlikely you could win a tort case based on the facts set out in your post.

Now, if a contractual relationship existed - things could be different.

<{POST_SNAPBACK}>

Even if it were likely wouldn't answer OP for under 300,000 baht.

[Sumitr Man]

r u taking the p*ss

[Dragonman]

r u taking the p*ss 

<{POST_SNAPBACK}>

As if Just that it seems a more complicated scenario than the case I retired on. Would have to get at least 5 partners involved.

[fxm88]

As a very broad generalisation, the system/facts you are talking of is under "common law".  Thailand adopts a "civil law" system.  As such, although not wholly the case, it is extremely unlikely you could win a tort case based on the facts set out in your post.

<{POST_SNAPBACK}>

OK, let me attempt to rephrase:

How comfortable should I be having phantom co-owner's of the company that owns my house? People whom I've probably never met and have little to no idea of their other involvements either before or after taking them on as co-owners.

If they were somehow placed in a position where they had to raise cash -- e.g. by court order or other government action -- could that then force the liquidation of their assets including the 10% of the company that holds title to my house? And if no buyer could be found for their 10% -- presumably I cannot buy it since I already own maximum allowed percentage -- could that in turn force the liquidation of the company's assets i.e. my house?

Edited August 14, 2005 by fxm88

[susah_sih]

Why do you want to set up a limited liability company to own property? So much trouble. First you need an auditor to audit for tax purposes. Every year you need to file income tax.

Moreover, the property gain when you eventually sold will be taxed at 30% as corporate income tax because that's corporate tax rule and you have been doing the tax filing every year to make the tax man aware of it.

If you bought it personally, you could get away from paying tax on the gain. (but then this may change in the future).

There has been cases where Land Department seized house/lands from foreigners who set up companies for purposes buying the land/house only. The law now only allows foreigners to buy land with value of at least USD1 milllion/Bt 40 million. So technically, you are against the law if you buy lands with values less than USD1 million.

Lastly most foreigners buy only condos instead of landed property like house. So you are limiting your resale market to only Thai property buyers, instead of the whole universe of property investor.

Hey All! I've read about how many farang "own" property using limited liability companies where a majority of ownership is held by non-voting Thai nationals. But what exactly are the limits of liability in this limited liability company? For example, suppose that someone goes onto the property and injures herself. Who is liable? Also suppose that any insurance policies have lapsed.

In some [western] countries the owners of the property can be subject to lawsuits and held financially responsible. What about Thailand? Are the owners of the company "jointly and singly" liable  (i.e. together as a group AND each owner individually)? What if the farang owner is out of the country? Can the Thai owners be held liable?

Can the property become subject to seizure? How is the value of that property determined: the "book value" (i.e. the price it was bought at)? or perhaps a value reflecting a possibly lower market price? or what? What if buyers are hard to find?

Now suppose that value of the property is less than the damages? Since the farang owner is absent can the Thai owners be forced to make up the difference? And if they claim not to have any money but it could be shown that they are owners of other similar property holding companies could those companies and/or properties also be subject to seizure?

In some countries "personal primary residences" are afforded special protection, e.g. in bankruptcy cases. What about Thailand? And can property owned by a company be considered a "personal primary residence"?

Thanks!

<{POST_SNAPBACK}>

Edited August 24, 2005 by susah_sih