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[LordPoona]

I registered for a thai company but have decided to follow a different path.

what is the correct procedure to dissolve a thai company that was never really 'active' ?

i could just 'walk away' but id like to do it right ..

any suggestions?

thanks

[gregb]

It's a real pain in the ass. You have to have a final audit done on the company from a certified accountant, even if you never started doing business. Best option is simply to hire a lawyer to shut it down for you. Plan on spending about 10k.

It's alot easier to open a company than it is to close one.

[hhgz]

You can simply ignore the reporting requirements and, in five years, the Thai government will shutter the company. The upside: there's no cost. The downside: it takes five years.

[p_brownstone]

Was the Company Registered for VAT?

Was the Company Registered for Thai Social Welfare - for Employees?

Contrary to what a previous Poster has written you cannot simply "ignore" the Monthly VAT and Social Welfare submissions but particularly the Audited Annual Accounts which - even if the Company has never Traded - must be signed off by a Thai Registered Auditor and submitted to the Revenue Department before the end of May in the next calendar year.

If you have Thai Shareholders - and obviously you must have - they will be liable for various personal, financial, penalties if these requirements are not complied with ........... and they will be most upset if that happens of course!

Patrick

[12DrinkMore]

If you have Thai Shareholders - and obviously you must have - they will be liable for various personal, financial, penalties if these requirements are not complied with ........... and they will be most upset if that happens of course!

That brings up an interesting topic.

When I opened up my company there were a bunch of Thais shareholders provided by the firm which set up the company. Had to pay them 1,000 Baht each. This was and is totally illegal, but "smiles all around" as I shovelled out the cash.

I decided to close the company which had never traded and, when they came back asking a huge amount, I pointed out the illegality of the shareholders and maybe I would just walk away from the company.Hmmm, that did not worry them in the slightest.

I suspect, but do not know, that

1. they could claim that I was sole signatory to the company so that had no responsibility

2. they could also demand their share of the company's "paid up" capital, which was (also illegally) never paid up but would have hit me for a million bahts.

3. as they are Thai's the stupid farang should pay up anyway

Think very carefully before you simply start a company.

[Sunbelt Asia]

Walking away from a company is not a good idea as monthly and yearly accounting reports still must be submitted to authorities, even if the company is not actively trading. Should these reports not be filed the Department of Business Development will send a warning letter outlining the late audit submission and giving a deadline. Once this deadline is passed the case is then handed to the Economic and Cyber Crime Suppression Police who will send three follow-up letters to the company address, asking the director to present himself in front of the officer and clarifying the offense. Should the director not respond to the summons the file will be transferred to the Courts where further fines and penalties will be set. If the director were still living in Thailand or wished to return to Thailand then legal difficulties could ensue.

Closing a company down as a foreigner is a one month process and is basically going back along the steps used to establish the company and clearing records such as VAT ID and other company registration elements. Government fees include 4,000 baht for closure as well as newspaper announcement, most lawyers will charge about 25,000 baht to undertake such closure on which you need to add 15,000 baht to be settled to the accountant to prepare and submit a closure audit. Together with associated travelling fees and taxes a company closure should average 50,000 baht, assuming the company does not hold any licenses, work permits, or other records to be cancelled.

The closure audit which spells out the business operations between the start of financial year and the point of time it will be closed cannot be filed if any late audits have been left outstanding. Those will need to be updated in order to clear the records and close the company. The same way, if the company ID had been blocked on the government network by the Economic and Cyber Crime Division, the accountant will not be able to submit any tax return prior clearing the matter with them.

Selling their company to a new owner is difficult as transfer costs would be almost the same as setting up a new company with clean records. Also, when transferring a company if the new owner discovers liabilities during due diligence they could simply deny the transfer.

If new owner were living overseas then they would simply go after the old directors for any liabilities.

[sunbelt][/sunbelt]