LIQUIDATION & DISSOLUTION

A company can close down due to various reasons. The closing of a company may be due to loss or damage and inefficiency to handle business operations, market fluctuations and market competition. Additionally, there might be a case of shareholders withdrawing their capital from the company to invest in other business ventures. Generally, the closing of a Thai company is a lengthy and complicated process. The closing process must be carried out efficiently and legally.

Once the company is decided to be closed by the shareholders, the finalization and auditing of the company's accounts is the first step to determining its assets and liabilities. Any pending or ongoing accounting and legal matters must be completed before the closing process is commenced. The company must appoint a liquidator to wind up all the affairs of the company and register it with the Ministry of Commerce. Under the Civil and Commercial Code of Thailand, (Section 1247 – Section 1273), the voluntary liquidation and dissolution process of a private limited company are set forth as follows.

A STEP-BY-STEP GUIDE TO

CLOSING A THAI COMPANY

To begin with the closing process, a company must invite all its shareholders for a meeting to decide and pass a resolution to dissolve the company. The decision will be based on the voting of at least 75% of the shareholders. The invitation for this meeting can be published as a letter in the local newspaper delivery service and in the local newspaper so that the stakeholders can acknowledge the receipt of the letter. This process of informing the shareholders must be done at least 14 days before the meeting. A liquidator will be appointed as a representative of the company, and its shareholders after the passing of the resolution to close the company. At this phase of the closing process, all the company's creditors must be notified of the decision and is also required to submit a closing audit to the Ministry of Commerce.
Once it is decided to close the company, an application must be filed at the Ministry of Commerce. In addition to it, the registration application and all the relevant documents for the company closure must be submitted by the company to the Department of Business Development after the meeting is adjourned.
Furthermore, the VAT registered companies are required to file an application with the provincial Revenue department for the dissolution of the VAT registration. All original VAT registration documents including VAT certificate and TAX ID forms should be submitted to the Revenue Department. Additionally, the company must also notify the social security office of its closure. The closing of the company also requires the cancellation and returning of any work permit and visa of foreign employees to the respective departments. In addition, it also requires the closure of corporate bank accounts and cancellation of any special government licenses and returning them to government authorities.
The next step involves the declaration and clearance of all outstanding debts of the company and the return of investments to its shareholders. Besides this, all the other assets of the company will be liquidated into cash and distributed among its shareholders based on their respective shareholding ratio.
Lastly, the company will apply for the liquidation registration at the Department of Business Development, hence completing the process. The company should report to the Department until the process is completed and the company has been officially closed down.

Bankruptcy or inability to pay back the debts also call for the closure of a limited company. In this case, a court order is required which appoints a liquidator to execute this process once approved. This requires legal paperwork and application filings which might be a bit of struggle for most owners. Therefore, it is always better to appoint an experienced legal staff to perform these cumbersome tasks efficiently in a timely manner.

THAI COMPANY

CLOSURE TIMELINE

Confirmation that no outstanding debts are due on the company.
Informing all of the company's shareholders of its closure by mailing an official letter by registered mail. This decision can be taken based on voting by at least 75% of the shareholders.
The letter of closure must be published in the local newspapers after 14 days from the approval date, to inform all of the company's creditors.
The company can then apply for liquidation registration at the DBD.
Once it is issued, the company will need to prepare the company accounts till date.
Those accounts are required to be completed, audited and approved by the shareholders.
Lastly, the company will close the liquidation at the DBD, Revenue Department, Social Fund and Labor Department (if applicable).
The entire process of closing a company in Thailand can take upto 45-90 days depending on the complexity of the financials, the availability of corporate shareholders, the registered capital, and other minor variables.

Our experienced legal professionals and accounting team have successfully accomplished the closure of companies in Thailand for innumerable reasons. With our esteemed years of experience, we have helped us to reduce tax implications and complete the closing process within the shortest timeframe. Cloud 7 Legal Services offers effective and reliable company dissolution services in Thailand at reasonable charges.