[ESTABLISHING A BUSINESS ENTITY IN THAILAND] 478
ESTABLISHING A BUSINESS ENTITY IN THAILAND Thailand has a civil or codified law system. The main legal codification governing commercial aspects in Thailand is prescribed under the Civil and Commercial Code (“CCC”) and other related Acts which are issued from time to time to govern specific circumstances.
foreigner’s ability to engage in them is regulated by the Foreign Business Act (“FBA”) . • Sole Proprietorship - Under the law, a person acting as a sole proprietor can engage in almost any lawful type of business with the exception of those businesses which have been otherwise regulated by the government. Taxation of a sole proprietorship business is calculated on a progressive personal tax rate. • Unregistered Ordinary Partnership - An Unregistered Ordinary Partnership is when two or more persons join together to conduct business without formally registering their operation. Unregistered ordinary partnerships are taxed as natural persons, but each partner must also separately file their own personal tax return. • Registered Ordinary Partnership - To form a Registered Ordinary Partnership, all particulars, including the partnership contract, capital contribution, management, and objectives, must be submitted to the Ministry of Commerce. Partner profits are subject to taxation, so profits are subject to two levels of taxation. A Registered Ordinary Partnership may convert its legal entity to a private limited company. This will be subject to (i) prior consent have been granted by all partners; and (ii) no objection has been raised by its creditors. Unless said debts have been settled or placed with security in the case of objection was made by any creditor.
The part of the CCC which refers to companies, called “Company Law” in other jurisdictions, is under Title XXII, “Partnerships and Companies” (Book III of the CCC). The CCC governs the establishment, management, shareholder and partner rights, and liquidation of partnerships and private limited companies. Public Companies are governed by the Public Limited Companies Act B.E. 2535 and the Securities and Exchange Act of the same year and its related Regulations and Announcements. Breaches of the CCC’s provisions concerning “Partnerships and Companies” may be subject to penalties under the “Act on Offence concerning Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundation” B.E. 2499. The following are the business entity types available in Thailand’s jurisdiction; however, a
ILN Corporate Group – Establishing a Business Entity Series
Made with FlippingBook Ebook Creator