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Order No. 1/2567 Provides New Compliance Rules for Companies with Over 5 Million THB Capital
The Central Partnership and Company Registration Office has recently issued a pivotal directive: Order No. 1/2567. This new order, which supersedes the previous Order No. 1/2566, introduces significant changes to the regulatory framework for the establishment, capital increase, and mergers of limited companies in Thailand. By setting forth comprehensive criteria and detailed documentation requirements, Order No. 1/2567 aims to enhance transparency and accountability within the corporate sector.
Aligned with the provisions of the Civil and Commercial Code (CCC), the updated regulations are particularly impactful for companies with registered capital exceeding five million THB, mandating stricter documentation to substantiate capital contributions whether in cash, assets, or labor. These measures are designed to ensure that all financial transactions are thoroughly verified, thereby bolstering investor confidence and promoting a robust business environment.
1. Key Provisions and Documentation Requirements
a. Establishment of Partnerships and Limited Companies
For the registration of limited companies with registered capital exceeding five million THB, documents are now required as follows:
- Cash Contributions: Previously, only a bank certificate was needed to prove the payment of share capital. The new order requires an additional confirmation letter from the company, stating that the share payment has been received as shown in the bank document.
- Asset Contributions: Previously, confirmation from the asset owner was sufficient. The new order mandates a detailed description of the assets. If the assets are registered, a copy of the ownership document must also be submitted.
- Labor Contributions: The new regulations require a confirmation letter of the share payment with labor and supporting documents, such as a copy of the employment contract.
B. Increasing Registered Capital
If the combined registered capital, both original and newly added, exceeds five million THB, the order mandates additional documentation as follows:
- Cash Contributions: A bank certificate confirming the payment of the share capital for the increased amount and a confirmation letter from the company must be submitted.
- Asset Contributions:
- Registered Assets: A confirmation letter of the share payment and a copy of the ownership document must be submitted. If the assets are for use, a copy of the usage agreement and ownership document must also be submitted.
- Unregistered Assets: A confirmation letter of the share payment or asset details and, in the case of assets for use, a copy of the usage agreement must be submitted.
- Labor Contributions: A confirmation letter of the share payment with labor and supporting documents, such as a copy of the employment contract, must be submitted.
c. Mergers of Limited Companies
Order No. 1/2567 introduces specific requirements for the registration of mergers of limited companies where the combined registered capital exceeds five million THB. These requirements ensure transparency and thorough documentation, similar to the guidelines for the establishment of companies and increasing registered capital, including new regulations of providing a confirmation letter stating that the payment for shares has been received, and the regulations of providing documents as aforementioned for labor contributions.
These measures ensure that mergers are conducted transparently and in compliance with the CCC, enhancing the overall integrity of corporate transactions in Thailand.
2. Implications for Corporate Registration
The updated regulations mark a significant shift from the previous framework, where incomplete documentation could lead to the cancellation of registration entries related to capital. Under the new order, the registrar will only note that the required documents have not been submitted in the company’s certificate. If the documents are submitted later by, or the capital is reduced to five million THB or less, or the increased capital that comes along with the merger is reduced, the registrar will remove the note from the company’s certificate.
Through this comprehensive overhaul, Order No. 1/2567 not only modernizes the registration process but also aligns it with international best practices and the CCC. These changes reinforce Thailand’s commitment to fostering a transparent and efficient corporate sector. By ensuring meticulous documentation and validation of capital contributions, the new regulations bolster investor confidence and promote a robust business environment. As businesses navigate these new requirements, they will contribute to a more transparent and accountable corporate landscape in Thailand.
If you have any questions regarding your business registration, taxation matters or corporate compliance matters, please contact us at [email protected] or via +66 (0)2 026 3284.