Memorandum of Association.
As explained in the step by step company registration guide, the second step of the formation process is filing the Memorandum of Association. A memorandum is a special agreement made by the founders/promoters of the company. It is an adjacent document to the Articles of Association and is regarded as an essential document of every company.
Making the Memorandum of Association
Each memorandum has to contain the following information:
- The name of the proposed company, which must always end with the word “limited”
- The part of the Kingdom in which the registered office of the company shall be situated
- The objectives of the company
- A declaration that the liability of the shareholders shall be limited
- The amount of share capital with which the company proposes to be registered, and the divisions thereof into shares of a fixed amount
- The names, addresses, occupations and signatures of the promoters, and the number of shares subscribed by each of them
A filled-in application for registration of memorandum of association (altogether with a 200 THB stamp duty) is to be submitted by any promoter or their attorney to the Commercial Registration Department.
Parallel to this step is a subscription of the authorised capital, albeit paid partly, by the initial shareholders. The Thai law doesn’t prescribe any minimum capital requirements, although its size needs to be adequate enough for the intended business operation. The memorandum registration fee rate is set at 50 THB per 100,000 THB of the registered capital, with the minimum fee amounting to 500 THB and the maximum one to 25,000 THB.
Next step is to convene a statutory meeting. Once the share structure has been defined, a statutory meeting is called. A minimum of 25% of the par value of each subscribed share must be paid.
Authorised capital, shareholder structure, shares and shareholders
As mentioned previously, the capital requirements are not defined by law and are largely left up to shareholders of the company. However, in order for a company to qualify for protection from the FBA under the Amity Treaty (in case of the US owners), the paid-up capital must be at least 3M THB. Furthermore, for each foreign employee holding a work permit and long term visa in Thailand, the company must show a capitalization of not less than 2M THB.
Succeeding filing a memorandum application and part of company registration process is also specifying the names, addresses and occupation of the proposed foreign company directors. As with the registered capital, there are currently no specific requirements regarding the nationality of the directors for a Thai private limited company.