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How To Close Thai Limited Company?

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How do I close a Thai Limited Company (in Phuket)?

Is it complicated?

How long does it take?

How much does it cost (doing it myself)?

How much does it cost (letting lawyer/accountant do it all)?

Is there a preferred time of the year to close it (from a hassle/tax point of view)?

Or... would I be better trying to sell it (without assets) to someone else who could change the name/description/main shareholder (me) and "use" my 6 other shareholders (who I don't know and have never met)?

Thanks!

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How do I close a Thai Limited Company (in Phuket)?

Is it complicated?

How long does it take?

How much does it cost (doing it myself)?

How much does it cost (letting lawyer/accountant do it all)?

Is there a preferred time of the year to close it (from a hassle/tax point of view)?

Or... would I be better trying to sell it (without assets) to someone else who could change the name/description/main shareholder (me) and "use" my 6 other shareholders (who I don't know and have never met)?

Thanks!

It's very complicated, and takes a really long time. It will cost a significant amount of money. Many foreigners will simply just leave the company and not close it. The cost of closing a company is something most business advisors will not tell you when helping you form a company.

I can tell you it’s definitely more expensive to close the company than it is it create the company. Sunbelt or some others I'm sure will chime in.

If you can prove to me, there aren't any outstanding liabilities; I might be willing to take it off your hands.

Matt

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Thanks for the reply Matt.

It definitely doesn't have any outstanding liabilities and it's squeaky clean (as far as I know) in terms of tax/paperwork etc. because I'm so paranoid about the authorities!

I'm not planning to offload it right now, I'm just getting the facts together to help me decide.

If the company is just left then presumably there will be ongoing liabilities such as filing six-monthly and annual reports etc.? It can't just be left totally dormant can it?

It would be useful if someone could let me know the minimum paperwork/expense required to leave a company "dormant".

Also still interested in specific info regarding closing it completely.

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CLOSING A COMPANY DOWN

As you will find, it is easier to start a company up then closing it down!

The company must:

1.Hold a Board of Directors' meeting to adopt and approve liquidation of the company and to fix dates for two separate General Meetings of shareholders to consider this. Any of the directors or a person authorized by the directors may issue notices calling for such shareholders' meetings, unless required otherwise by the Articles of Association of the company.

2.General Meeting (first) of the shareholders is to adopt a special resolution to liquidate and dissolve the Thai company. A liquidator and an auditor will be appointed by the meeting for such purpose.

3.General Meeting (the second) of the shareholders will confirm the special resolution adopted in the first meeting. The second meeting must be not less than fourteen days and not more than six weeks from the date of the first meeting, unless stated by the Articles of Association of the company.

4.Place two successive advertisements in a local newspaper announcing the company liquidation to allow creditors (if any) to make a claim for debts owed to them by the company.

5.Send to all creditors a letter by registered mail requesting them to file a debt claims owed to them by the company.

6.File the relevant application documents together with copies of the special resolutions with the Company and Partnership Registration Office, Commercial Registration Department, Ministry of Commerce, within 14 days from the date of the second shareholders' meeting.

7.The appointed auditor must prepare and certify the financial statements (Balance Sheet and Accounts) as of the date of dissolution. The date of such financial statements must be the date of the second shareholders' meeting (i.e., the confirming meeting).

8.Hold a shareholders' meeting to approve the financial statements for submission to the Ministry of Commerce.

9.Submit a report of the liquidator every three months to the Ministry of Commerce. This obligation shall continue until completion of the liquidation process.

10.Once the liquidator has cleared the assets and liabilities and has called on debtors for payment of debts to the company, the liquidator must call a final meeting of the shareholders to approve the final liquidation of the company. The minutes of the meeting shall be submitted to the Ministry of Commerce within fourteen days from the date of the meeting.

11.Submit application to the Thai Revenue Department for liquidation of the company and return the original Value Added Tax Certificate and original Tax Identification Card in the name of the company.

12.When the Revenue Department grants approval, the liquidator shall notify and submit a copy of such approval to the Ministry of Commerce in order to obtain final approval from the Ministry.

13.The liquidator has the duty to deposit all the company's books of accounts with the Registrar's office, where they shall be kept for ten years counting from the date of final approval of the liquidation. (In practice, the Ministry does not keep the books of accounts. Instead, it asks the liquidator to keep the books and notify the Registrar of such fact by letter.)

above from Sunbelt.com.

it's not easy!!!!

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Thanks thaipwriter.

Actually that's a lot of words but doesn't seem so bad for a very simple company like mine.

Does anyone know what the actual official government fee is for closing a limited company (not the lawyer/accountants fee)?

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Another option is to find an accountant/lawyer and change the company address to their office as a "virtual office". Then, since the monthy accounts will be trivial and so will the yearly audits, I assume you might be able to keep it inactive for a few thousands baht a year.

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Thanks thaipwriter.

Actually that's a lot of words but doesn't seem so bad for a very simple company like mine.

Does anyone know what the actual official government fee is for closing a limited company (not the lawyer/accountants fee)?

did you get the personal message I sent you?

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Seems to be quite a lot of work to liquidate and close a Company, perhaps this makes the purchase of land using a Company safer than I thought.

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I talked to my account (AA Accounting in Phuket) about this yesterday.

They told me they charge 20,000 baht to close a limited company. But if it's done at the same time as the annual report then they still charge just 20,000 for both.

My annual report costs me 15,000 baht so this seems like a bargain at just 5,000 extra. I would have to tell them by February if I want to do this but will probably not do it this year.

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Can i pick up this thread as its something i'm currently interested in.

Somebody above has stated how you go about closing the company, another has stated his lawyers cost for doing so - all useful stuff.

But what about not closing the company but making it virtually inactive or dormant?

I am the MD of my own small construction consultancy. The fees I earn are the company’s income. I then take a salary from the company. The company has expenses such as a company car expenses (purchase of the car, petrol & tolls, insurance, etc); accountants monthly fee, lawyers annual fee (for work permit & visa class B renewal) and others. I employ my wife and family members as staff so there are other minor salaries and social security to be paid for all of us. The income is generally higher than the expenses but when have no client then it becomes a problem. I’ve been offered some work which is of interest. However for the first time since I opened the company 6 years ago the client wants to employ me direct on his payroll as his employee. Their conditions mean that they want me to transfer my work permit to their company.

This gives me a problem that by doing so my company has no income. Another problem is that we have ongoing company expenditure (i.e. company car for several more years). I would also like to keep the company for a minor website idea I have to try and create some extra income and would like to retain the company entity to be able to do that business and any other that my come along. Finally I really don’t want to close the company down completely due to the time and everything else invested in it.

So if I do as my client wants, but retain the company, here are my questions:

1. Say we have no income and no expenditure (hypothetical) how long can I keep trading / keep company alive without problems from the authorities?

2. Anybody any ideas what I can do about the company car, for example? How can I get it off the company books to me personally bearing in mind it’s a deal between the company and a finance company? Or does anybody have solution how I might take care of the car and the minor expenses that would remain with my company.

3. Anybody have any general comments about my situation and any advice of how to go about this – I really could do with this work but I’m unsure how I could go about taking care of the company matters without closing down.

cheers,

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... the client wants to employ me direct on his payroll as his employee. Their conditions mean that they want me to transfer my work permit to their company...

Does this client explicitly claim exclusiviness? Or does he merely want to have his "arrangement" with you to be a regular employer-employee situation, because he sees that as the most econimical regarding tax and whatever?

If he doesn't explicitly requires exclusive rights over you - well you don't have to "transfer" your workpermit in the sense that you cancel your own company as employer. You can just get your client added as a second employer.

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... the client wants to employ me direct on his payroll as his employee. Their conditions mean that they want me to transfer my work permit to their company...

Does this client explicitly claim exclusiviness? Or does he merely want to have his "arrangement" with you to be a regular employer-employee situation, because he sees that as the most econimical regarding tax and whatever?

If he doesn't explicitly requires exclusive rights over you - well you don't have to "transfer" your workpermit in the sense that you cancel your own company as employer. You can just get your client added as a second employer.

The client can not or will not explian why he requires this, however i believe that they are concerned that i may do other works (in their time?) or something along those lines - hard to say really.

So if i undersatnd you correctly, to my work permit as MD of my company i could the employment with this client as a further job - is that correct? Presumably then the money i receive from them as a direct employee would be taxed at source by them, and if i earn any other money through my company i would pay income tax through my company? In summary then the work permit would refer to a position, company, location, etc x 2 companies.

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Can i pick up this thread as its something i'm currently interested in.

So if I do as my client wants, but retain the company, here are my questions:

1. Say we have no income and no expenditure (hypothetical) how long can I keep trading / keep company alive without problems from the authorities?

2. Anybody any ideas what I can do about the company car, for example? How can I get it off the company books to me personally bearing in mind it’s a deal between the company and a finance company? Or does anybody have solution how I might take care of the car and the minor expenses that would remain with my company.

3. Anybody have any general comments about my situation and any advice of how to go about this – I really could do with this work but I’m unsure how I could go about taking care of the company matters without closing down.

cheers,

anybody have any advice comments particularly on keeping a compnay but making it dormant or as good as dormant - whats the minimum amount of trading you can get away with? Any beauracratic problems to be aware of?

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Sorry, i forgot to add before - do our friends at Sunbelt have any advice / comments? Appreciate it.

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It is nothing that money can't fix.

If you chose to invest further funds in your company to cover the operating expences there should not be any problem. It becomes a shelf company for a while.

Alternatively you could put the money on the books as a loan, the company can repay you when it becomes cash flow positive You will probably not pay tax on the repaid capital as you have paid tax on the principal amount when you earned it as an employee, if you chose to charge interest that will be taxable.

Finace companies and banks are usually not too choosey as to where the money comes from so long as the get paid, so if you paid them from your personal account as opposed from the company account they will not make too much noise. Once the finance is complete the company can sell the car as it sees fit. If you use the loan idea you can transfer the car to yourself as (part) payment of the loan.

I would run this by a local accountant / lawyer but this is standard procedure for many small businesses.

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