Best Way To Free Up Capital Of Ltd Co

[hanuman1]

Hi everyone

My Thai wife and I started a limited company (51/49) about 6 months ago. 250,000Bt has sat in the company bank account for the last six months as 25% of the registered capital. The situation at present is that we desperately need to free up that money so that a significant proportion of it can be ploughed back into the company (for stock etc).

The multitude of questions I have include: what would be the best way to get at that money? Does it have to stay in the bank the whole time? Can we reduce the registered capital to 500,000? Or should we change the legal form of the company to something different? Limited Partnership, Sole Trader (wife), or are there any others that may be suitable or more cost effective? And if we change the legal form of the company, could the current company name be used by someone else?

My wife and I have known each other for 13 years and have 2 children, so trust is not an issue.

Loads of questions, I know, but please feel free to pick at any you think you may be able to enlighten me on.

Many thanks

H.

[Cyberstar]

Can't give you complete answers to everything - you'd have to contact a lawyer, anyway, to get things done eventually. Here's those things I have an idea about:

No, the registered capital doesn't have to remain on the company account - the company is free to spend it on company expenses, company assets and even give yourself a loan (properly booked of course).

Although it is possible to change the registered capital - it isn't a simple thing to do. It involves a lot of paperworks (which I don't know about) and expenses. Wether or not you'd want to do it anyway - the crucial question is: Do you need a workpermit? ... If not, then the registered capital could be just symbolic - e.g. 35 baht (7 shares of 5 baht each) ... But if you need the workpermit, then 1 million baht is minimum for someone married to a Thai.

You cannot change the company into something else - you can close the company with all that takes and form another kind of entity with all that takes.

[Chang_paarp]

Sunbelt will be able to clear this up, but my understanding the funds used for the registered capital can be used as working capital. In other words it can be used to purchase stock, paying staff, paying rent, purchasing capital equipment such as tills or shop fittings and generally making the company run. It is part of the investment in the company and should be used to make the company work. You should be able to access the money once the business is registered with the investment as registered capital.

Just keep a paper trail of where the money went. If you are intending to register for VAT (almost a necessity if a falang is on the books) you will have to do that very soon as the tax office can get snotty about this. You are supposed to file a VAT return regularly (monthly?) even if there has been no activity on the books.

Do you have the other shareholders too? My understanding is that there has to be a minimum of 7 shareholders. You can do it 49,000 shares for you, 50,995 for the wife and 1 share each for the outlaws or some similar configuration.

A half way professional accountant can help here or better still find a good one.