The scene is the private office of Pramote,a senior partner of pramote,Kannikar,and Associates,pramote has just started giving advice to his clients,Sermsak Labtawee and tom martin,who are industrial designers. Sermsak and Tom are seeking advice on setting up small business organization to sell knock-down furniture.
Pramote: If remeber correctly,you're the one who rang me up yesterday afternoon and asked me for advice on setting up a business.
Tom: yes,we did. We'd like to ask your advice regarding various types of business, so that we know where we stand with the law.
Pramote: Fine.I'll do my best to help you.
Tom: We've heard that you're a very good corporate lawyer and one that we can trust.
Pramote: Thank you I always try to advise each of my clients in such a way that his interests will be protected.
Sermsak: Well,how would you suggest that we set up our business?
Pramote: Well,an individual can conduct his business in the form of a sole proprietor-ship. But if more than one person is involved,you may want to set up your business in the form of a partnership or corporation.
Tom: What exactly are the differences between a partnership and a corporation?
Pramote: Well, under Thai law,a partnership needs to have two or more persons joining together to carry on a business. They are jointly and unlimitedly liable for all business obligations.
tom: And what about a corporation?
Pramote: The Thai Civil and Commercial code states that to constitute a limited company,there must be at least seven promoters,who subscribe their names to a memorandum (of association). This limited company under the Thai law is comparable to an American corporation.
Tom: In our case,it appears that we would have to set up a partnership,for we have only two partners in our planned business.
Pramote:Yes,that's right.Then the next thing you would need to decide is what type of partnership to establish.
Tom: Oh,is it possible to set up more than one type?
Pramote: Yes,actually there are three types of partnership in Thailand. The first one is the non-registered ordinary partnership. This is the least formal arrangement. The second is the registered ordinary partnership.
Tom: What exactly is the difference between these two types?
Pramote: They are similar,but in the second case, after registration, a separate entity is created.
Sermsak: What are the pros and cons of setting up the two types?
Pramote: In the second case,the creditor can sue the partnership; whereas in the first case,he would have to sue the partners directly.
Sermsak: What difference would that make to us?
pramote: You would have an advantage with the second arrangement in that the assets of the partnership would be used to satisfy the debt before the creditor could sue you individually. In the first set-up,he could go after your individual assets right away.
Tom: So it appears that the registered ordinary partnership would be more advantageous?
Pramote: Yes,not only are your individual assets better protected this way,but also the more formal nature of this set-up gives it more credibility with customers.
Tom: Fine.Now what about the third type of partnership?
Pramote: This is called the limited partnership. As the name implies,some of the partners are afforde limited liability under this arrangement. However,these partners cannot manage the entity. And the partner or partners legally authorized to manage the business would be confined to those who have unlimited liability.
Sermsak:Would this type of partnership be appropriate in our case?
Pramote:No,I don't really think so. This type of partnership is generally used when there are several partners,some of whom are not active in the day-to-day operations of the business. These partners can thus be afforded limited liability.
Tom: But in our case,we will both be actively involved in running the business.
Pramote: Exactly. That is way I think that the registered limited partnership is definitely the best arrangement for you.
Tom: All right. Thank you very much for your explanation and advice.
Pramote: Not at all. It was my pleasure.
Tom: Fine.Now what about the third type of partnership?
Pramote: This is called the limited partnership. As the name implies,some of the partners are afforde limited liability under this arrangement. However,these partners cannot manage the entity. And