Closing a Thai company.
Steps of closing a Thai company.
Step 1To start the process, a company must hold a shareholders’ meeting to pass a special resolution to dissolve the company. The decision to close the company must be acknowledged and voted by at least 75% of the shareholders. It is important to send an invitation for this meeting to the shareholders prior to the meeting. Publishing the Letter in the Local Newspaper delivery Service must be ensured so that the stakeholders’ will acknowledge the receipt of the letter. The same letter should be published in a local newspaper too. This step must be done at least 14 days before the date of the shareholder’s meeting.Passing of the resolution must be followed by appointing at least 1 liquidator to represent the company, and its shareholders, to close the company.
Step 2When the decision to close the company is finalized, an application must be filed at the Ministry of Commerce.At this step, the company must notify all of its creditors and will also need to submit a closing audit to the Ministry of Commerce. The registration forms and supporting documents for the company closure must be submitted to the Department of Business Development once the shareholders meeting is adjourned.
Step 3Companies which are VAT registered will need to submit an application to the provincial Revenue department to dissolve VAT registration. All original VAT registration documents such as the VAT certificate and TAX ID forms must be returned to the Revenue Department. The company must also inform the social security office of its closure. Any work permit and visa of foreign employees will need to be cancelled and returned to respective departments. Additionally, company bank accounts will need to be closed as well. If the company has applied for any special government licenses, these must also be cancelled and returned back to the government authorities.
Step 4The next step will be to declare and clear all outstanding debts of the company and to return investment back to its shareholders. All remaining assets of the company must be liquidated into cash and divided among the shareholders in the amount of their respective shareholding ratio.
Step 5The final step will be to register the liquidation with the Department of Business Development and complete the process. There will be timely reporting to be done with the Department until the closure process is completed and the company has been officially wound down.
Timeline to closing a Thai company.
The timeline for closing a company in Thailand can vary from 45-90 days depending on the complexity of the financials, the registered capital, the availability of corporate shareholders and other minor variables.
- Confirmation that the company has no outstanding debts
- By sending a letter by registered mail, all the shareholders need to be informed of the intention to close the company (this decision can be taken by 75% of the votes)
- After 14 days, the decision to close the company needs to be published in a local newspaper to also inform the creditors
- Only then, the necessary government forms to put the company into liquidation can be filed at the DBD
- Once this is done, accounts up until that date will be prepared
- Those accounts will need to be audited and approved by the shareholders
- The last step will be to close the liquidation at the DBD, Revenue Department, Social Fund and Labor Department (if applicable)