What is registered captial?

[hansomman]

When starting a company in Thailand as a non-Thai I commonly see stated that you need 2-3 million in "resisted capital". If I have 3 million baht on hand, and want to use it as registered capital does this money go into my companies bank account? Or am I paying this money to the gov of Thailand as a fee of sorts and will never get it back?



Does the money put in as registered capital have to just sit in a bank somewhere without being touched? Can it be used for the business, such as to pay rent for an office and pay workers salaries?

If I decide to halt my business, can I withdraw the capital assuming it has not been spent?



Thanks.

Edited October 29, 2014 by hansomman

[N47HAN]

The capital of 2 million does not need to be on hand in cash.

It can ( and almost always is ) a projection of assets / turnover / profit etc for your first year of trading

Example ,

You have a car that the company " purchases " from you at a value of xxxx then that can contribute towards the 2m.

Or at least it did when i started my company , but that was a very long time ago. Don't think the rules have changed though.

Sent from my GT-N7100 using Thaivisa Connect Thailand mobile app

Edited October 29, 2014 by N47HAN

[mccw]

I saw a lawyer recently and asked this question; this is how he described it to me:

The money needs to be shown as cash in your personal account at the time of company formation. After that you can do what you want with the cash. Put in company; keep personal; whatever.

It the purpose of the registered capital is meaning under the Limited Liability of the company; this cash amount is what you are legally liable for.

[maisodni]

Within the context of your question:

Registered capital is the number of shares issued by your company, times the par value per share. So - if you have 20,000 shares, with each share valued at 100 baht at time of issue, you then have 2,000,000 baht registered capital.

When you start a company you must pay government fees based on the amount of capital that you register. To file the Memorandum of Association, you must pay a capital registration fee of 0.0005 times the amount of registered capital. Upon registration of the company, you must pay a capital registration fee of 0.005 times the amount of registered capital.

Conceptually, initial share capital is needed in order to provide working capital to pay a company's operating expenses, up until the company achieves "break even" financial results. If you run out of start up capital before you achieve break even financial results, it means that your company is insolvent, and cannot pay its bills - and basically goes bankrupt.

Thailand imposes some artificial capital requirements upon companies wishing to sponsor foreign work permits. To employ with work permit each foreigner who is not legally married to a Thai, a company must have 2,000,000 baht registered capital. That amount is reduced to 1,000,000 baht for each foreigner who is legally married to a Thai.

"Paid up" capital is cash (or assets of specified equivalent value) that is placed under control of directors by a shareholder, in exchange for shares being issued to that shareholder. Paid up capital is intended to be used to purchase necessary assets, and pay company's operating expenses, in order for a company to pursue its intended business activities.

MS

Edited November 2, 2014 by maisodni

[hansomman]

So if I have 2,000,000 baht in a Thai bank, all I have to do is show proof of that? I am a US citizen and am allowed to own 100% of a Thai registered Ltd company. Can I just draft up the shares and say they all belong to me? Then I can use the money as operating expense? What if the capital falls below 2M? Am I required to halt my business?

I am going to consult with a lawyer who is an expert on these matters but getting a high level view from people on the forum helps out.

[mccw]

Capital can go under 2 million according to the one I saw.

But I would be interested to hear your and others results of legal consultation.

[Matzzon]

If I were you, I would do a hell of a lot more research before starting a company. To me you are lacking elementary knowledge, and at this time it would very possibly result in a total failure.