5. Forms of Business Organization
The principle forms of business organization are: limited liability
companies incorporated in Thailand (either private or public);
partnerships; branch offices; representative offices; and regional
offices.
5.1 Limited Liability Companies
The nature and form of a limited liability company in Thailand is
essentially the same as in many other jurisdictions. The capital of a
limited liability company is divided equally and is represented by
shares of a designated (par) value. The liability of each shareholder is
limited to the unpaid portion of the shares held. Limited liability
companies may be either private companies, which are subject to the
Civil and Commercial Code (the “CCC”), or public companies, which
are subject to the Public Limited Companies Act, B.E. 2535 (1992).
5.1.1 Private Limited Companies
At least three natural persons (not necessarily Thai citizens) must act
as promoters to establish a private limited company, with each
promoter holding at least one share, thus becoming a shareholder upon
incorporation. The par value of share of a private limited company is
at least 5 baht and each share must be at least 25% paid-up. Promoters
must execute a Memorandum of Association (MOA), which includes
the company’s name and location, objectives, registered capital,
number of shares, and details of the promoters. The company must
register its MOA with the Ministry of Commerce. After the share
subscription has been completed, the Promoters must hold a statutory
meeting to adopt Articles of Association, elect the first directors,
appoint an auditor, etc. The incorporation of a private limited
company can be completed within one day, provided that all
conditions under the CCC are met. Generally, there are no restrictions
as to the nationality of the directors, except for companies that engage
in certain commercial activities. Shares in a private limited company
may not be offered publicly. However, a private limited company may
issue certain debt instruments to the public, subject to the approval
from the Securities and Exchange Commission (SEC), under the
authority of the Securities and Exchange Act, B.E. 2535 (1992) (the
“SEC Act”).
Private limited companies that have registered capital of more than 5
million baht are subject to additional requirements to submit evidence
issued by a commercial bank to prove that the capital injection is
made into the companies' bank accounts.