The Company Limited structure is the most utilized type of legal entity in Thailand. A Company Limited is a stand-alone legal entity under Thai Law. There are two types of limited companies in Thailand. These are the Private Limited Company governed by the Civil and Commercial Code, and the Public Limited Company governed by the Public Company Act.
Private Company Limited
Private limited companies in Thailand are formed through a process that leads to the registration of a Memorandum of Association (MOA) and Articles of Association as its constitution. These companies are managed by Board of Directors in accordance with the company laws and its Articles of Association. A minimum of three shareholders is required at all times. All shares must be subscribed to, and at least 25% of the subscribed shares must be paid up. Both common and preferred shares of stock may be issued, but all shareholders must have voting rights.The shareholders enjoy limited liability, i.e. limited to the remaining unpaid amount, if any, of the par value of their shares.
Public Company Limited
Public limited companies are governed by the Public Limited Company Act B.E. 2535 (A.D. 1992), as amended by Public Limited Company Act No. 2 B.E. 2544 (A.D. 2001) and Public Limited Company Act No. 3 B.E. 2551 (A.D. 2008). The rules and regulations concerning the procedure of offering shares to the public is governed by the Securities and Exchange Act B.E. 2535 (A.D. 1992) and the amendments thereto. All companies wishing to list their shares on the Stock Exchange Thailand (SET) must obtain the approval of and file disclosure documents with the Securities and Exchange Commission, and then obtain SET approval to list their shares.
A minimum of 15 promoters is required for the formation and registration of a Public Limited Company, and the promoters must hold their shares for a minimum of two years before they can be transferred, except with the approval of the shareholders at a meeting of shareholders. The board of directors must have a minimum of five members, and meetings must be held at least once every three months. At least half of the directors must be live in Thailand. Directors’ liabilities are substantially increased. Each share of the company shall be equal in value and be fully paid up.