Closing A Company

[jamie46]

WHat is the procedure for closing a thai company that was set up to buy a house but because of the new laws/guidelines failed and now i want to close it.

I would prefer not to go back to the cheating real estate company lawyer who set it up.

Another option maybe is to let it die itself. it owns nothing and never did any trading.

appreciate any information.

[Thaipwriter]

companies dont die, ever.

Best bet is to sell it in a classified advert on here

[Sunbelt Asia]

WHat is the procedure for closing a thai company that was set up to buy a house but because of the new laws/guidelines failed and now i want to close it.

I would prefer not to go back to the cheating real estate company lawyer who set it up.

Another option maybe is to let it die itself. it owns nothing and never did any trading.

appreciate any information.

Liquidation and Dissolution of a Limited Company in Thailand

Sections 1247 through 1273 of the Civil and Commercial Code of Thailand are the applicable provisions in the event of voluntary liquidation and dissolution of a private limited company in Thailand by its shareholders. In accordance with the provisions, the company shall proceed in the following order.

(1) Hold a Board of Directors' meeting to adopt and approve the proposed liquidation of the company and to fix the dates for two separate General Meetings of the shareholders to consider the issue. Any of the directors or a person authorized by the directors may issue notices calling for such shareholders' meetings, unless required otherwise by the Articles of Association of the company.

(2) Hold the first General Meeting of the shareholders to adopt a special resolution to liquidate and dissolve the company. A liquidator and an auditor shall be appointed by the meeting for such purpose.

(3) Hold the second General Meeting of the shareholders to confirm the special resolution adopted in the first meeting. The second meeting must be held not less than fourteen days and not more than six weeks from the date of the first meeting, unless a longer notice period is required by the Articles of Association of the company.

(4) Place two successive advertisements in a local newspaper announcing the liquidation of the company to alert creditors (if any) so they can make a claim for debts owed to them by the company.

(5) Send to all creditors a letter by registered mail requesting them to file a claim for debts owed to them by the company.

(6) File the relevant application documents together with copies of the special resolutions with the Company and Partnership Registration Office, Commercial Registration Department, Ministry of Commerce, within fourteen days from the date of the second shareholders' meeting.

(7) The appointed auditor must prepare and certify the financial statements (Balance Sheet and Accounts) as of the date of dissolution. The date of such financial statements must be the date of the second shareholders' meeting (i.e., the confirming meeting).

(8) Hold a shareholders' meeting to approve the financial statements for submission to the Ministry of Commerce.

(9) Submit a report of the liquidator every three months to the Ministry of Commerce. This obligation shall continue until completion of the liquidation process.

(10) Once the liquidator has cleared the assets and liabilities and has called on debtors for payment of debts to the company, the liquidator must call a final meeting of the shareholders to approve the final liquidation of the company. The minutes of the meeting shall be submitted to the Ministry of Commerce within fourteen days from the date of the meeting.

(11) Submit application to the Thai Revenue Department for liquidation of the company and return the original Value Added Tax Certificate and original Tax Identification Card in the name of the company.

(12) Once the Revenue Department grants approval, the liquidator shall notify and submit a copy of such approval to the Ministry of Commerce in order to obtain final approval from the Ministry.

(13) The liquidator has the duty to deposit all the company's books of accounts with the Registrar's office, where they shall be kept for ten years counting from the date of final approval of the liquidation. (In practice, the Ministry does not keep the books of accounts. Instead, it asks the liquidator to keep the books and notify the Registrar of such fact by letter.)

The liquidation process takes approximately one to two years to complete, depending on the number of years the company had been in operation and whether its books were properly maintained and tax returns filed as required by law.

www.sunbeltasiagroup.com

[Firefan]

Sunbelt; how much would you charge for handling above procedures and what would the other costs (gov./stamps ETc.) be? Cheers!

[gnoel]

We have a trading company in Bangkok that has accumulated losses over the years, and we have thus decided to close it down. Will the procedure be similar to what's mentioned above? 1 - 2 years seem a long period for the whole procedure. We have kept proper accounting & audit every year. Is there any easier and more straight forward way to go about it? What's the total cost involved? We have 3 staff in the company, each having worked about 7 years. How much do we have to compensate?

[Sunbelt Asia]

We have a trading company in Bangkok that has accumulated losses over the years, and we have thus decided to close it down. Will the procedure be similar to what's mentioned above? 1 - 2 years seem a long period for the whole procedure. We have kept proper accounting & audit every year. Is there any easier and more straight forward way to go about it? What's the total cost involved? We have 3 staff in the company, each having worked about 7 years. How much do we have to compensate?

Our fees are 25,000 Baht plus the cost to advertise in the newspaper and the audits.

If everything went smooth, it may take 9 months but to be conservative, with nobody stating they are owed money, it will be around one year.

The severance for each person working 7 years would be 240 days wage.

Depending also if in the contract with the employee it states that

phone is provided

car is provided

incentive bonus

Housing allowance

Thirteen month bonus

is "wage" or a "benefit" If it was wage this would be added as well.

Thai law states that the company must give a minimum of one payment period notice of termination or payment in lieu of notice of termination.

Let’s say it was Sept 15th. You would either need to allow them to work till Oct 31st or terminate them immediately and pay the employee's full wage till Oct 31st.

Example: They were getting 40,000 Baht a month salary

40,000 Baht /30 days =1,333.33 daily wage

240 days x 1,333.33 = 320,000 Baht

They had a thirteen month bonus scheme which was “wage” this would be 40,000 Baht

You let them go today. They would get paid 80,000 Baht for August and September.

They would get then get paid 440,000 Baht each.

www.sunbeltasiagroup.com

[Chang_paarp]

Could the company with losses be sold with those losses on the books?

To help offset a company that has profit?

Or if the company changed direction following purchase could the losses be used against future profits?

[Sunbelt Asia]

Could the company with losses be sold with those losses on the books?

Yes

To help offset a company that has profit?

Yes

Or if the company changed direction following purchase could the losses be used against future profits?

Yes, up to 5 years of losses can be applied.

www.sunbeltasiagroup.com

[howzzat123]

If the MD of the limited company (Co., LTD) happens to be a foriegner and if he exited the country without closing the company then what will happen?? No staff, no liabilities.....

One of my known guy had this same problem.

Edited March 2, 2009 by howzzat123

[changnaam]

What would be the situation if a Ltd co with assets and very small debt was closed by Thai director without notifying western shareholders?

This is obviously not legal but would it be treated seriously by authorities?

Thanks