Illegal To Sell Company Land To Thai Wife

[simon43]

I have a Thai ltd company, with myself as the sole director and the only person authorised to sign for the company etc. The company was set up primarily to provide software consultancy, but I never got round to doing this because I was too busy with other overseas work.

This company does own some land in Phuket which it bought a few years ago. I loaned the company all the funds to purchase the land.

Because of the 'inactivity' of this company, I decided some time ago to close it. But I can only do this after it has disposed of it's only asset - the land. A few months ago, the company sold half of this land to another Thai company. I was the only person required to authorise this sale and no questions were raised. The land transfer tax was paid and the revenue earned from the sale of the land was used to repay some of the loan that I had originally made.

Now I want to dispose of the rest of the land, so that closure of the company can start. So I want to 'sell' this land to my Thai wife. Any profit on the sale (over the original purchase price), will of course, attract corporation tax, and I (the company),must also pay the land transfer tax.

Now here is the problem. During the preparation of the sale contract, my lawyer has said that it is illegal for a Thai company to sell land, (or any other company asset), to the wife of the company director! The lawyer told me that if I went ahead and made this sale to my wife, then there could be big problems for me, my wife and the lawyer in the future!

He explained that it wasn't because I was farang. He said this law applied to all ltd company directors, farang or Thai.

This is the first time that I have heard of this law, and it will certainly make it very difficult to transfer this land out of the ltd company!

Can someone more knowledagable than me please advise whether this lawyer is talking 'kosher' or out of the back of his head?? If kosher, how on earth can I transfer this asset and close the company?

BTW, my wife is not a shareholder of the Thai company. The major shareholder (who has no authorisation to sign company papers, bank account etc), is my exGF, who I lost contact with some 2 years ago.

Simon

[Sunbelt Asia]

You are open to a collusion charge by the shareholders.

Elect another director to the company with both directors signatures required.

www.sunbeltasiagroup.com

[simon43]

You are open to a collusion charge by the shareholders.

Elect another director to the company with both directors signatures required.

www.sunbeltasiagroup.com

ok - except that the only people I know whom I trust are family members. Can Sunbelt provide a 'temporary' director? What is the procedure to elect a second director? Do they have to be an existing shareholder and do the existing shareholders have to vote?

Simon

[astral]

Does this apply if you sell to another family member?

I want to wind up my company and transfer the property to my wife's two sons.

[Sunbelt Asia]

ok - except that the only people I know whom I trust are family members.

Can Sunbelt provide a 'temporary' director?

If they are elected by the shareholders.

What is the procedure to elect a second director?

Have a meeting and elect another director.

Do they have to be an existing shareholder and do the existing shareholders have to vote?

A director does not need to own one share( unless stated different in the By-laws) and shareholders are the ones that elect the director.

Does this apply if you sell to another family member?

yes

I want to wind up my company and transfer the property to my wife's two sons.

How old are the sons?

www.sunbeltasiagroup.com

[astral]

I want to wind up my company and transfer the property to my wife's two sons.

How old are the sons?

www.sunbeltasiagroup.com

24 and 16.