Buying An Existing Company

[sciack]

Hello,

I have the opportunity to buy a limited company which is not operating now. It should be a 2 million or 4 million baht capital.

If I buy this (they asked a low price of 50,000 about), what are the advantages? First I think I could use this company to get a work permit, right? And I will not need to deposit any money for capitalization, right?

Can I use this company to get a loan from my bank?

Is it worth it to have a company without a real activity just for the purpose of a working permit? What will be the annual cost of this? I live in Thailand but actually I do not work here, my business is oversea, but in my situation I can't get any loan for car or other things, maybe buying a company could help me for this or for my visa.

Thanks for help.

[Sunbelt Asia]

Before purchasing an inactive company make sure that it has kept its annual audits and tax payments up to date. Make sure the company has no debts as well, otherwise you may find it much more costly to bring up to date than it would be to start a new company altogether. The capitalization is not necessarily simply depositing funds in a bank but can also be collateral etc. You may need four Thai employees instead of 2 the first year since its not a start up.

Its unlikely you are getting 4 million Baht in assets or cash for 50,000 Baht, most likely the initial capitalization was entered as a director's loan.

Forming a new company with Sunbelt Asia would be cheaper then 50,000 investment.

It can be costly to keep a company running as taxes must be paid, audits must be filed and the work permit office will in all likelihood not renew the work permit for an inactive company as a profit must be shown within a few years.

It would be difficult to obtain a loan for an inactive company unless you put up collaterol of your own, banks generally require the company to have a profit and trading history.

[sunbelt][/sunbelt]