5.2 Partnerships
A partnership is a form of business organization in which two or more
parties join for a common business purpose and share the profits.
Partnerships may be ordinary or limited.In ordinary partnerships, all partners have joint and unlimited liability
for the debts and obligations of the partnership. Ordinary partners may
contribute money, other property, or labour to the partnership. These
partnerships may be registered or unregistered.
Registering an ordinary partnership provides some protection for the
partners. First, a partner in a registered partnership may make a claim
on behalf of the partnership against third parties, even if the partner
was not named in the transaction giving rise to the claim. Second, the
liability of partners in a registered partnership ceases two years after
they leave the partnership, whereas they would be continuously liable
in an unregistered partnership. Third, creditors must exhaust all assets
of the partnership before they can pursue claims against the individual
partners. Finally, creditors of an individual partner, in their individual
capacity, may only make claims against any profit that the partnership
owes to the indebted partner and not against the property of the
partnership as a whole.
In a limited partnership, some partners have only limited liability for
the obligations and debts of the partnership. Limited partners can only
contribute money or other property to the partnership, and they cannot
contribute labour, participate in the management of the partnership, or
have their name included in the name of the partnership. If they do so,
they will lose their status as limited partners and assume full liability,
along with any ordinary partners. Limited partnerships must be
registered. Registered ordinary partnerships or limited partnerships
that contain at least three partners may convert into private limited
companies, in accordance with the CCC.
Partnerships 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
partnerships' bank accounts.