THAI COMPANY DISSOLUTION
Closing a company requires strict compliance with the laws and regulations of the relevant Thailand government agencies. Financial, Auditing and Legal aspects of the company must be settled accordingly.
A limited company may be dissolved due to the following:
- If provided by its regulations
- The company is formed for a specified period of time, by the expiration of such period
- The company is formed for a single undertaking, by the termination of that undertaking
- Special resolution to dissolve the company
- The company is bankrupt
A limited company may also be dissolved by the Court on the following grounds:
- If default is made in filing the statutory report or in holding the statutory meeting.
- If the company does not commence business within a year from the date of registration or suspends its business for a whole year.
- If the business of the company can only be carried on at a loss and there is no prospect of its fortunes, being retrieved.
- If the number of the shareholders is reduced to less than three.
According to Thai Law, shareholders’ meeting must be summoned to discuss the liquidation process and to confirm the appointment of the liquidator(s). Invitation letters must be published in a local newspaper and must also be sent by registered mail to all the shareholders of the company at least 14 days prior to the date of the meeting. The meeting may direct the liquidators to make an inventory or whatever is necessary for the settlement of the affairs of the company. The liquidators have the authority to settle the affairs of the company, to pay its debts and to allocate its assets.
The dissolution of the company and the names of the liquidators must then be registered with the Department of Business Development, Ministry of Commerce within 14 days from the approved closing date of the company. The liquidators must, as soon as possible, prepare the company’s Financial Statement and have it examined and certified by the appointed auditor and consequently notify the public by advertising in a local paper announcing the liquidation of the company to warn its creditors, if any. A notice should also be sent by registered mail to each creditor requesting them to file a claim for debts owed to them by the company. The liquidators may require the shareholders to pay their unpaid shares at once. If the liquidators find that after the shares have been paid up and the assets are still insufficient to meet the liabilities, they must apply at once to the Court to start bankruptcy proceedings.
The company must file its tax return and settle all taxes due. VAT registered companies have to apply for VAT de-registration within 15 days prior to the company’s closing date and return the TAX I.D. card along with the VAT Registration Certificate (Por Por 20) to the Revenue Department. A penalty shall be imposed for failure to comply within the specified time.
Once the assets and liabilities of the company are fully liquidated, the liquidator must call the final shareholders’ meeting to present an account report of the liquidation showing how the liquidation has been carried out and how the assets of the company have been disposed of. After the account report is approved, the proceedings of the meeting must be registered with the Department of Business Development within fourteen days from its date by the liquidators. Such registration is taken as being the end of the liquidation.
During the liquidation process, the liquidators must file a report of their activities, showing the accounting of the liquidation process every three months with the Department of Business Development until the liquidation process is finished and the Revenue Department has issued a letter to the DBD certifying that the company is free of taxes. The DBD will then issue a document to certify that the company’s liquidation has been completed.
After the liquidation, the balance sheets of the liquidated company shall be deposited within fourteen days at the Department of Business Development where they shall be kept after the end of the liquidation wherein they shall be open for public inspection.