Forced Sale Of Company By Thai Wife

[JJJIIIMMM]

hey guys - hope you are well

my wife and i live in thailand, and recently she has been ranting and raving the word divorce around a lot

we have only been married one year, but things are no fun a lot of the time

before we were married we bought a company, so as to acquire the ownership of a house. the company is set up with a 49% share to me, the same to my wife, and 2% to some lady down at the accountancy office (as advised to us by our german accountant (the lady has already "signed out" her 2% back to the company))

i was set up as the sole director of the company

now i dont really want to divorce, but my wife is insistent

i believe i can contest the divorce, and this will slow it down long enough for me to decide what to do, but i am worried about her 49% share of the company

i presume that she cannot force me to sell out - is this correct?

and also, is she able to selll her 49% of the company to anyone she can find, or is this also unlikely? the house the company owns is worth about 2.5m baht, and she would happily accept a lot less than 1m baht, i imagine, if she could find a buyer.......

do you think she can force me to sell, and if not, do you think she would have much likelihood of finding a buyer if she offered her 49% at a much reduced rate, or is that share quite worthless without the directors consent to the change of ownership?

hoping you can help

[commande]

Well considering you own 49% and she owns 49% what happened to the other 2% that was returned to the company??? Who owns that, you can't own it and those shares have to be issued to someone that is Thai?

Friend of mine in Bangkok ran into this problem a while back, actually about 7 years ago but I don't think a lot has changed. What he did is got an attorney (Thai attorney) who bought the 51% Thai shares, split the ownership of those shares between two different Thai's who held them in trust while the search for a new Thai business partner was conducted; law office held over half of the 51% shares so that the other minority Thai owner couldn't take over the company. All this was documented in the event there was any issue which there wasn't. Not sure the timeline for doing it this way (to find another investor) or even if it can still be done but he found a Thai partner, a real one with money who bought into the company.

He of course vacated his shares about 2 years later and reopened the company (Thai partner went out of business in about 90 days) under the Thai/American Amnity Treaty, might not be an option here unless you are a US Citizen. Under that agreement you don't need a Thai partner but it's only for American's and there are some restrictions and more money is involved, I think about 3 Million Baht capitalization but I could be wrong. Been a while since I looked at that stuff.

Edited May 31, 2013 by commande

[UKJASE]

good luck JJJIIIMMM - hope you can sort it out

Edited May 31, 2013 by UKJASE

[JJJIIIMMM]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

[commande]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake -in other words you can't control the business solely. Your 2% business partner can be a Director if you want (not really a business partner and I'm not even sure that is legal anymore), but anyway, I don't think it matters how many shares she owns as long as it is legitimate and he is part of the Board. You then can vote to make her shares frozen from external sale BUT you have to also be willing to purchase them if she wants to sell out at a fair market value.

You can't hold her hostage to her shares and she has every right to divest. Honestly this stuff can get very complicated really fast because you are limited as to what you can do being a foreigner. Not sure what to advise you except for trying to find a buyer for her shares and convince her to sell out. Problem with the house complicates things, you have to liquidate the house before you can even shut the business down because you can't own it and it's in the business name.

Your in a very complicated situation.... Might be a good idea to seek legal advise instead of posting here, half what I am saying I consider the old way of doing things and is possibly dated, rules change all the time especially in Thailand and generally not in the better interest of protecting foreigners but more so in empowering Thai's with more authority.

One last thought, your accounting office trust me could care less about you, don't fool yourself. Plus it's an employee of the accounting office that owns the shares not the accounting office so they are free and clear anyway and even though she signed off already for sale you don't have a buyer so in effect she still owns them, they have not been transferred. Your wife could easily go and pay her 1000 baht and have her right in a date without your consent why because you would fall into minority status with only 49% total authority. The Thai's will agree with this because your not authorized to control majority company decisions so you could be forced out.

As a foreigner you can't really protect yourself against CAPEX losses within the company or additional OPEX exposure. You can protect yourself from a cash side though and ensure the money goes straight into a business bank account and then you transfer it immediately out into a personal account. Your investment will always be up for a 100% loss unless you start selling off the Assets and pocketing the money.

Edited May 31, 2013 by commande

[SteveReilly]

You should translate company docs to see who is company's Managing Director..i believe that every thai company has to have a thai managing director..also the 2% of shares must belong to someone..it cannot be blank

[TravelerEastWest]

You should translate company docs to see who is company's Managing Director..i believe that every thai company has to have a thai managing director..also the 2% of shares must belong to someone..it cannot be blank

Is this a new rule about Thai companies needing a Thai managing director?

I always thought a nonThai could own 49% and all the common shares and be the managing director and have complete control. The Thai shareholders would own preferred shares with no voting rights.

[Khun Jean]

You could give yourself a 30 year lease registered on the chanote of course. Will make selling shares even more difficult because who would want shares from a company that only has land that is rented out for 30 years.

Then offer 500.000 cash or more if you want.

[jbrain]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

If you are in the possesion of the document where she signed over her shares, you should find as soon as possible a Thai national which you know will take your side to take over those shares.

Your wife can sell her share to whoever she wants, nobody will be interested because wit 49% of the shares they have no voice.

Edited May 31, 2013 by jbrain

[bbradsby]

Ah, call me cynical, but it sounds like wifey's in the Collection Phase of the Thai Wife-Farang playbook. Maybe look at just selling the house, and paying the wife off with a few packs of thousand baht notes sitting on the table. else, you may be in for a few hundred thou of legal & accounting expenditures and a couple years' worth of headaches, after which you'll pay her to leave anyway.

[commande]

As they say and many books have been written on this very topic. Going into business with partners and even worse family generally always ends bad for the minority partner, better to not have any business partners at all or only silent investors.

Good luck to you and hope everything works out for you.

In Thailand you always have to protect yourself, even when family is involved.

[Paul888]

My advice would be to take the path of least resistance and future headache. Talk to your wife, come to an amicable agreement to sell the house and split the proceeds in whichever way can be negotiated.

Very few farangs can "win" when taking on a Thai wife over property purchased through a Limited Company.

[Somrak]

I think the business contract was worth nothing from the beginning, as the construct intended do go around thai law.

The good thing for you is, that you was not married as the money did go in the comp. => you have the chance to become parts of this investments back, when you hire a good lawyer..

[p_brownstone]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake -in other words you can't control the business solely. Your 2% business partner can be a Director if you want (not really a business partner and I'm not even sure that is legal anymore), but anyway, I don't think it matters how many shares she owns as long as it is legitimate and he is part of the Board. You then can vote to make her shares frozen from external sale BUT you have to also be willing to purchase them if she wants to sell out at a fair market value.

You can't hold her hostage to her shares and she has every right to divest. Honestly this stuff can get very complicated really fast because you are limited as to what you can do being a foreigner. Not sure what to advise you except for trying to find a buyer for her shares and convince her to sell out. Problem with the house complicates things, you have to liquidate the house before you can even shut the business down because you can't own it and it's in the business name.

Your in a very complicated situation.... Might be a good idea to seek legal advise instead of posting here, half what I am saying I consider the old way of doing things and is possibly dated, rules change all the time especially in Thailand and generally not in the better interest of protecting foreigners but more so in empowering Thai's with more authority.

One last thought, your accounting office trust me could care less about you, don't fool yourself. Plus it's an employee of the accounting office that owns the shares not the accounting office so they are free and clear anyway and even though she signed off already for sale you don't have a buyer so in effect she still owns them, they have not been transferred. Your wife could easily go and pay her 1000 baht and have her right in a date without your consent why because you would fall into minority status with only 49% total authority. The Thai's will agree with this because your not authorized to control majority company decisions so you could be forced out.

As a foreigner you can't really protect yourself against CAPEX losses within the company or additional OPEX exposure. You can protect yourself from a cash side though and ensure the money goes straight into a business bank account and then you transfer it immediately out into a personal account. Your investment will always be up for a 100% loss unless you start selling off the Assets and pocketing the money.

Quote :

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake

Unquote :

You are confusing Shareholders with Directors.

A foreigner can be a Director - even the Sole Director - of a Company, without necessarily being a Shareholder.

Patrick

Edited June 1, 2013 by p_brownstone

[commande]

Thank you for the correction, been a very long time since I really looked into any of this so understand as stated my information could be wrong.

[jbrain]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake -in other words you can't control the business solely. Your 2% business partner can be a Director if you want (not really a business partner and I'm not even sure that is legal anymore), but anyway, I don't think it matters how many shares she owns as long as it is legitimate and he is part of the Board. You then can vote to make her shares frozen from external sale BUT you have to also be willing to purchase them if she wants to sell out at a fair market value.

You can't hold her hostage to her shares and she has every right to divest. Honestly this stuff can get very complicated really fast because you are limited as to what you can do being a foreigner. Not sure what to advise you except for trying to find a buyer for her shares and convince her to sell out. Problem with the house complicates things, you have to liquidate the house before you can even shut the business down because you can't own it and it's in the business name.

Your in a very complicated situation.... Might be a good idea to seek legal advise instead of posting here, half what I am saying I consider the old way of doing things and is possibly dated, rules change all the time especially in Thailand and generally not in the better interest of protecting foreigners but more so in empowering Thai's with more authority.

One last thought, your accounting office trust me could care less about you, don't fool yourself. Plus it's an employee of the accounting office that owns the shares not the accounting office so they are free and clear anyway and even though she signed off already for sale you don't have a buyer so in effect she still owns them, they have not been transferred. Your wife could easily go and pay her 1000 baht and have her right in a date without your consent why because you would fall into minority status with only 49% total authority. The Thai's will agree with this because your not authorized to control majority company decisions so you could be forced out.

As a foreigner you can't really protect yourself against CAPEX losses within the company or additional OPEX exposure. You can protect yourself from a cash side though and ensure the money goes straight into a business bank account and then you transfer it immediately out into a personal account. Your investment will always be up for a 100% loss unless you start selling off the Assets and pocketing the money.

Quote :

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake

Unquote :

You are confusing Shareholders with Directors.

A foreigner can be a Director - even the Sole Director - of a Company, without necessarily being a Shareholder.

Patrick

But if a foreigner is sole director he will need to have a workpermit to sign any document. If not the other party can make a claim with court and dispute the validity of the signed documents.

[joeaverage]

You should translate company docs to see who is company's Managing Director..i believe that every thai company has to have a thai managing director..also the 2% of shares must belong to someone..it cannot be blank

Is this a new rule about Thai companies needing a Thai managing director?

I always thought a nonThai could own 49% and all the common shares and be the managing director and have complete control. The Thai shareholders would own preferred shares with no voting rights.

this is my understanding as well

[p_brownstone]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake -in other words you can't control the business solely. Your 2% business partner can be a Director if you want (not really a business partner and I'm not even sure that is legal anymore), but anyway, I don't think it matters how many shares she owns as long as it is legitimate and he is part of the Board. You then can vote to make her shares frozen from external sale BUT you have to also be willing to purchase them if she wants to sell out at a fair market value.

You can't hold her hostage to her shares and she has every right to divest. Honestly this stuff can get very complicated really fast because you are limited as to what you can do being a foreigner. Not sure what to advise you except for trying to find a buyer for her shares and convince her to sell out. Problem with the house complicates things, you have to liquidate the house before you can even shut the business down because you can't own it and it's in the business name.

Your in a very complicated situation.... Might be a good idea to seek legal advise instead of posting here, half what I am saying I consider the old way of doing things and is possibly dated, rules change all the time especially in Thailand and generally not in the better interest of protecting foreigners but more so in empowering Thai's with more authority.

One last thought, your accounting office trust me could care less about you, don't fool yourself. Plus it's an employee of the accounting office that owns the shares not the accounting office so they are free and clear anyway and even though she signed off already for sale you don't have a buyer so in effect she still owns them, they have not been transferred. Your wife could easily go and pay her 1000 baht and have her right in a date without your consent why because you would fall into minority status with only 49% total authority. The Thai's will agree with this because your not authorized to control majority company decisions so you could be forced out.

As a foreigner you can't really protect yourself against CAPEX losses within the company or additional OPEX exposure. You can protect yourself from a cash side though and ensure the money goes straight into a business bank account and then you transfer it immediately out into a personal account. Your investment will always be up for a 100% loss unless you start selling off the Assets and pocketing the money.

Quote :

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake

Unquote :

You are confusing Shareholders with Directors.

A foreigner can be a Director - even the Sole Director - of a Company, without necessarily being a Shareholder.

Patrick

But if a foreigner is sole director he will need to have a workpermit to sign any document. If not the other party can make a claim with court and dispute the validity of the signed documents.

Certainly.

Patrick

[Dork]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake -in other words you can't control the business solely. Your 2% business partner can be a Director if you want (not really a business partner and I'm not even sure that is legal anymore), but anyway, I don't think it matters how many shares she owns as long as it is legitimate and he is part of the Board. You then can vote to make her shares frozen from external sale BUT you have to also be willing to purchase them if she wants to sell out at a fair market value.

You can't hold her hostage to her shares and she has every right to divest. Honestly this stuff can get very complicated really fast because you are limited as to what you can do being a foreigner. Not sure what to advise you except for trying to find a buyer for her shares and convince her to sell out. Problem with the house complicates things, you have to liquidate the house before you can even shut the business down because you can't own it and it's in the business name.

Your in a very complicated situation.... Might be a good idea to seek legal advise instead of posting here, half what I am saying I consider the old way of doing things and is possibly dated, rules change all the time especially in Thailand and generally not in the better interest of protecting foreigners but more so in empowering Thai's with more authority.

One last thought, your accounting office trust me could care less about you, don't fool yourself. Plus it's an employee of the accounting office that owns the shares not the accounting office so they are free and clear anyway and even though she signed off already for sale you don't have a buyer so in effect she still owns them, they have not been transferred. Your wife could easily go and pay her 1000 baht and have her right in a date without your consent why because you would fall into minority status with only 49% total authority. The Thai's will agree with this because your not authorized to control majority company decisions so you could be forced out.

As a foreigner you can't really protect yourself against CAPEX losses within the company or additional OPEX exposure. You can protect yourself from a cash side though and ensure the money goes straight into a business bank account and then you transfer it immediately out into a personal account. Your investment will always be up for a 100% loss unless you start selling off the Assets and pocketing the money.

Quote :

First of all there has to at least be a Thai director, you can't be the only one because Directors have the right to vote and you being foreign can't be the only Director as your only entitled to 49% minority stake

Unquote :

You are confusing Shareholders with Directors.

A foreigner can be a Director - even the Sole Director - of a Company, without necessarily being a Shareholder.

Patrick

But if a foreigner is sole director he will need to have a workpermit to sign any document. If not the other party can make a claim with court and dispute the validity of the signed documents.

I have been wondering for a while whether this is in fact true.

As far as I'm aware there is nothing in law saying specifically that a foreigner must have a work permit in order to become a company director. However without a work permit, as soon as that director signs a document they would be in breach of the labour law. Unless......... that foreign director was not physically in Thailand when he signed the document.

The Working of Aliens Act has a vague but all encompassing definition of work. It is however very specific when describing the place or location that work is carried out. I don't see how it could possibly be enforceable outside Thailand.

A few years ago, I actually put this question to our company lawyer. He hummed & hawed before answering that he couldn't think of any legal impediment to this solution.

Or is there a catch? Any opinions welcome.

[Arkady]

Well considering you own 49% and she owns 49% what happened to the other 2% that was returned to the company??? Who owns that, you can't own it and those shares have to be issued to someone that is Thai?

Friend of mine in Bangkok ran into this problem a while back, actually about 7 years ago but I don't think a lot has changed. What he did is got an attorney (Thai attorney) who bought the 51% Thai shares, split the ownership of those shares between two different Thai's who held them in trust while the search for a new Thai business partner was conducted; law office held over half of the 51% shares so that the other minority Thai owner couldn't take over the company. All this was documented in the event there was any issue which there wasn't. Not sure the timeline for doing it this way (to find another investor) or even if it can still be done but he found a Thai partner, a real one with money who bought into the company.

He of course vacated his shares about 2 years later and reopened the company (Thai partner went out of business in about 90 days) under the Thai/American Amnity Treaty, might not be an option here unless you are a US Citizen. Under that agreement you don't need a Thai partner but it's only for American's and there are some restrictions and more money is involved, I think about 3 Million Baht capitalization but I could be wrong. Been a while since I looked at that stuff.

Treaty companies can't own land. They need 3 million paid-up capital for each work permit (half that if the foreign worker is married to a Thai) but otherwise not.

[Arkady]

Post deleted

Edited June 3, 2013 by Arkady

[Arkady]

But if a foreigner is sole director he will need to have a workpermit to sign any document. If not the other party can make a claim with court and dispute the validity of the signed documents.

I have been wondering for a while whether this is in fact true.

As far as I'm aware there is nothing in law saying specifically that a foreigner must have a work permit in order to become a company director. However without a work permit, as soon as that director signs a document they would be in breach of the labour law. Unless......... that foreign director was not physically in Thailand when he signed the document.

The Working of Aliens Act has a vague but all encompassing definition of work. It is however very specific when describing the place or location that work is carried out. I don't see how it could possibly be enforceable outside Thailand.

A few years ago, I actually put this question to our company lawyer. He hummed & hawed before answering that he couldn't think of any legal impediment to this solution.

Or is there a catch? Any opinions welcome.

The only cases I know of where directors got into trouble for not having WPs were people who applied for PR and got knocked back by Immigration when they noticed they had second jobs that weren't entered on their WPs. I think both had salaries or director's fees from the other directorships which was how Immigration spotted they had unaccounted for income from employment from their tax receipts.

I was the sole director of a company for some time and signed all documents for it without a WP for several years without problems. The only problem I encountered was that Bangkok Bank refused to open a bank account unless I had a WP in the name of the company. No problem I went over the road and opened an account with Kbank instead. Later on I actually got a WP with the company and remained sole director.

I don't see any problem with the foreign director's ability to bind the company without WP. If he is registered with the MoC as sole authorized signatory, then he has the power to bind the company. That leaves the way open for some one to complain to Labour Ministry or Immigration that he has been in breach of WP regulations but the fact that he had worked illegally wouldn't invalidate his binding of the company, INHO, because that condition is not explicit in the Civil and Commercial Code.

[Arkady]

the other 2% was owned by an employee of the accountancy office who helped us to buy the company. this office employee immediately signed over these shares, without dating their signature, and put a copy of their ID card on file. this, the accountant advised us, means that when we come to sell the company, be it in 5 / 10 years time, those 2% of the shares will already be signed over, and it will only require my wife and i to sign over our shares, and the company can be sold....... so i guess in effect no one controls that 2%, but i am sure that my wife would never be able to gain control as the accountant would have been very lacking in his duties to me if he were to give her control, and his is a big company with many farang customers, so i am sure he does not want any bad publicity

your friend idea Commande sounds like one idea that is open to me in the future, thankyou for telling us about this

i am more bothered about the immediate future tho - is my wife likely to be able to sell her share to a bank / a random third party / loan shark etc and leave me with many days of worry ahead, or does it take a joint agreement between my wife and i, before she is able to sell?

Some one has to own the shares. So this sounds like it is supposed to mean that the accounting employee still owns the shares but has signed undated documents to transfer the shares. Personally I would not take anyone's word for this. I would either go or send a messenger to one of the Ministry of Commerce's Business Development Dept (Thailand registrar of companies) branches to get a copy of the company's current shareholder's list. At the same time you should get the company's affidavit to confirm that you are still the sole authorised director. This shouldn't cost more than about B500 and you can get it within a day. It is quite important that you ensure this 2% is in safe hands and is not going to be sold to an ally of your wife who would thereby get control of the company.

There is nothing in the Civil and Commercial Code that prevents any shareholder from freely selling shares they own to any party for any price. In private companies shareholders may sign a shareholders' agreement that gives right of first refusal to each other, if any one wants to sell their shares and a pricing formula can be agreed in advance. If anyone decides to ignore such an agreement, they can go ahead sell anyway and the transfer of shares won't be blocked. However, the other shareholders can seek redress in the civil courts for breach of agreement. In this case, as long as the 2% balancing stake is in safe hands, your wife's minority stake is of no interest to normal businessman. Only mafia types who believe they kick you out might be interested but they probably wouldn't want to pay your wife anything anyway.

The wife can't force you to sell the property while she is a minority shareholder. She could theoretically put up a motion at an AGM or EGM to sell the property but would be voted down by shareholders.

In the event of divorce in Thailand you have to divide the conjugal property that was acquired after marriage. Since you both own 49% in the company, that asset is already divided equally, so nothing more to divide. If you sold the property and left the money sitting in the company, there is still nothing she can do regarding divorce because she still owns the same number of shares as you. As sole director you can lend the money to yourself and leave Thailand and there is nothing she can do under Thai law.

If you think, she is likely to cause trouble, it might be best to pre-empt things by selling the house yourself. Then you can think of ways to get the money out of the company without paying dividends that would have to be shared with the wife. Since offshore investments are now liberalised you could set up an offshore company (BVI or similar) and make a board resolution to invest in its shares. Remit the proceeds of the house sale to the BVI company. Then either remit it back to Thailand as a personal loan to yourself from the BVI company or leave it overseas beyond your wife's clammy hands. The money will still appear on the balance sheet of the Thai company as an asset at cost. So the value of the company in the accounts will be unchanged. Some years later the auditors might insist on a write down, if the overseas investment is still not paying any dividends. Then you can start writing off the unfortunate investment over a few years and pass on the sad news of the impaired investment value to the shareholders!

Edited June 3, 2013 by Arkady

[JJJIIIMMM]

Thanks for all the great advice on this thread guys. It has given me plenty to think about

i will come back and tell you how we get on some time soon.

[Theoutsider]

Ah, call me cynical, but it sounds like wifey's in the Collection Phase of the Thai Wife-Farang playbook. Maybe look at just selling the house, and paying the wife off with a few packs of thousand baht notes sitting on the table. else, you may be in for a few hundred thou of legal & accounting expenditures and a couple years' worth of headaches, after which you'll pay her to leave anyway.

Your cynical:)