Dissolving A Company

[Paul8888]

I set a limited company up about 2 or 3 years ago, and used some Thai friends as my partners.

However, after registering for the company, I never actually used it for any business, nor did I do any accounting (since the company never operated).

My Thai friend is extremely worried now, saying he received a government letter about having to pay a fine or something along those lines.

Can anybody tell me the best way to deal with this situation? How much is it likely to cost to end this matter?

Thanks in advance, really appreciate any help you can offer me

[Sunbelt Asia]

It is inadvisable to "walk away" from a company 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 they would have legal difficulties.

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 the new owner were, for instance, a nominee living abroad then the government would simply go after the old directors for any outstanding liabilities.

[sunbelt][/sunbelt]

[12DrinkMore]

As soon as you set up a company you are required to submit annual accounts. It does not matter whether you consider the company to be non-operating. I was in the same position and with great intentions and expectations started up a company. I then discovered a lot more about running companies in Thailand and realised I was setting myself up for a lot of work with minimal reward.

But every year I had to submit the annual report, cost about 8,000 Baht; Two years ago I got feed up with this waste of money, which could be far more enjoyably invested in beer, so I closed the company down. Luckily my accountant was sympathetic and charged me around 14,000 Baht. I had other quotes up to and above 60,000 Baht.......

I suggest that you take on an reliable and trusted accountant with good connections and get him to sort it all out.

[Paul8888]

As soon as you set up a company you are required to submit annual accounts. It does not matter whether you consider the company to be non-operating. I was in the same position and with great intentions and expectations started up a company. I then discovered a lot more about running companies in Thailand and realised I was setting myself up for a lot of work with minimal reward.

But every year I had to submit the annual report, cost about 8,000 Baht; Two years ago I got feed up with this waste of money, which could be far more enjoyably invested in beer, so I closed the company down. Luckily my accountant was sympathetic and charged me around 14,000 Baht. I had other quotes up to and above 60,000 Baht.......

I suggest that you take on an reliable and trusted accountant with good connections and get him to sort it all out.

Thank you very much for your replies.

I didn't realise this was so serious

Could you recommend your account to me? I don't have a lot of money and would need this doing as cheaply as possible.

Any help is really appreciated

[Paul8888]

It is inadvisable to "walk away" from a company 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 they would have legal difficulties.

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 the new owner were, for instance, a nominee living abroad then the government would simply go after the old directors for any outstanding liabilities.

[sunbelt][/sunbelt]

Thank you so much for your informative reply.

Can you help with this situation? If so, how much would it cost?

Basically, the company address was a place I was staying, and I moved out over 2 years ago, so we did not receive any of the warning letters.

My thai friend has now received this letter about a fine or something to his home address, and he is really anxious about it.

I know I really should have dissolved the company properly, but I took advice from a bad lawyer, who told me the company would just disappear and there was no need to do anything about it

I have been away from thailand for several months, and just returned. There wouldn't be any problems for me leaving the country would there?

If you can provide assistance, I would be really grateful.

[Phil Conners]

Check out this post from 3 days ago. I believe it addresses your questions.

[kuffki]

Sorry to go little off topic

But what is needed and what is the procedure for moving company from one accountant to another?

Say OP had the company registered with company A, and company A want to charge him 50000 baht but he found company B, that will do it for half that.

So what is needed and how can the company be transferred between the accountants?

[Phil Conners]

Sorry to go little off topic

But what is needed and what is the procedure for moving company from one accountant to another?

Say OP had the company registered with company A, and company A want to charge him 50000 baht but he found company B, that will do it for half that.

So what is needed and how can the company be transferred between the accountants?

There are normally nothing linking a company and an accountant. If you have your company papers you just take them to the other company.

But maybe I don't understand your question. You say the company was already registered with company A - so what is company A going to charge him 50,000 baht for? Of course if company A already created the company he needs to pay the agreed price for it, even if he later find a company B that will do it for less.

[12DrinkMore]

Sorry to go little off topic

But what is needed and what is the procedure for moving company from one accountant to another?

Say OP had the company registered with company A, and company A want to charge him 50000 baht but he found company B, that will do it for half that.

So what is needed and how can the company be transferred between the accountants?

This is not a problem, unless the first company has kept all the company documents, company stamp and you have signed a document allowing them to sign documents on your behalf.

1. Make sure you have all the original company documents

2. Go to the next accountant, who will be very pleased to do the work.

The issues will occur if the original accountant has all the documents and starts being awkward.

[kuffki]

Sorry to go little off topic

But what is needed and what is the procedure for moving company from one accountant to another?

Say OP had the company registered with company A, and company A want to charge him 50000 baht but he found company B, that will do it for half that.

So what is needed and how can the company be transferred between the accountants?

There are normally nothing linking a company and an accountant. If you have your company papers you just take them to the other company.

But maybe I don't understand your question. You say the company was already registered with company A - so what is company A going to charge him 50,000 baht for? Of course if company A already created the company he needs to pay the agreed price for it, even if he later find a company B that will do it for less.

In OP's case Company A (possibly) want to charge him 50 000 to dissolve the company, but he finds another company that will do it cheaper.

In my case, my accountant is rather unreliable, so i want to change. I have asked new accountant how to do that and after 1 hour of talk, while he said many things, he did not tell me anything what i actually need to do to change.

[kuffki]

Sorry to go little off topic

But what is needed and what is the procedure for moving company from one accountant to another?

Say OP had the company registered with company A, and company A want to charge him 50000 baht but he found company B, that will do it for half that.

So what is needed and how can the company be transferred between the accountants?

This is not a problem, unless the first company has kept all the company documents, company stamp and you have signed a document allowing them to sign documents on your behalf.

1. Make sure you have all the original company documents

2. Go to the next accountant, who will be very pleased to do the work.

The issues will occur if the original accountant has all the documents and starts being awkward.

Thank you!

In my case, accountant has all the papers, i mean everything, but does not have an authority to sign on my behalf.

So to move the company, i would need to ask old accountant to give me all the original documents?

[12DrinkMore]

Thank you!

In my case, accountant has all the papers, i mean everything, but does not have an authority to sign on my behalf.

So to move the company, i would need to ask old accountant to give me all the original documents?

Yes, they belong to you, so he should give them to you.

You are not "moving the company" merely employing somebody else to do the accounting.

[kuffki]

Thank you!

In my case, accountant has all the papers, i mean everything, but does not have an authority to sign on my behalf.

So to move the company, i would need to ask old accountant to give me all the original documents?

Yes, they belong to you, so he should give them to you.

You are not "moving the company" merely employing somebody else to do the accounting.

Thanks for that, i thought so, but seem to be having troubles getting any papers from the accountant. Even already got my lawyer involved and still not much of a result

[Phil Conners]

In OP's case Company A (possibly) want to charge him 50 000 to dissolve the company, but he finds another company that will do it cheaper.

In my case, my accountant is rather unreliable, so i want to change. I have asked new accountant how to do that and after 1 hour of talk, while he said many things, he did not tell me anything what i actually need to do to change.

Yes, as 12DrinkMore already replied, just take your paper to the new accountant and have him do it.

It's unfortunate that your accountant won't give you your papers. They are yours and he should, but TiT as you know. Your lawyer ought to know how to deal with it, even if it may take some time.

Your new accountant really ought to be able to explain all this to you.

[kuffki]

In OP's case Company A (possibly) want to charge him 50 000 to dissolve the company, but he finds another company that will do it cheaper.

In my case, my accountant is rather unreliable, so i want to change. I have asked new accountant how to do that and after 1 hour of talk, while he said many things, he did not tell me anything what i actually need to do to change.

Yes, as 12DrinkMore already replied, just take your paper to the new accountant and have him do it.

It's unfortunate that your accountant won't give you your papers. They are yours and he should, but TiT as you know. Your lawyer ought to know how to deal with it, even if it may take some time.

Your new accountant really ought to be able to explain all this to you.

Thank you for the information, will continue the battle. Hope the info also helped the OP, as he may encounter similar problems(hope not)

[12DrinkMore]

Thanks for that, i thought so, but seem to be having troubles getting any papers from the accountant. Even already got my lawyer involved and still not much of a result

This is utter bullshit, but predictable.

Go and physically stand in his office until he gives you YOUR company documents. You should not have to pay a lawyer to extract them from him.

[keestha]

Yes of course. Reminds me of am incident a long time ago when I went to get my papers back from an "accountant" who obviously didn't do anything but charge. I was lucky, when I went there that morning there was only a girl working who looked like she was sixteen, she gave me my papers instantly. Hope she didn't get fired for doing this without calling the boss first.

OP be assertive, especially if you don't owe this guy anything you have the fullest right to require your papers being given back.