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In registering a new business or investing in either a new or existing business, all investors hope for the greatest outcomes. However, their dreams do not always come true. Some investors face nightmares either from expected or unexpected losses. The loss might be severe enough for the business to seek dissolution. Therefore, Thailand company dissolution is an issue worth being concerned about.
Even though losses alone might force a company to dissolve, it is not the only reason for dissolving a business in Thailand. The dissolution might also occur when required by law or court order. Legal dissolution in Thailand takes place for the following reasons (according to article 1236 of the Civil and Commercial code):
● By company’s regulations;
● Upon the expiration of a specific period, if the business is formed for a specific period of time;
● If formed for a single undertaking, by the termination of that undertaking;
● By a special resolution to dissolve;
Moreover, the company might be dissolved by court order for the following grounds (article
1237 of the Civil and Commercial code):
● If a default is made in filing the statutory report or in holding the statutory meeting;
● If the company does not commerce its business within a year from the date of registration or suspends its business for a whole year;
● If the business of the company can only be carried on at a loss and there is no prospect of its fortunes being retrieved;
● If the number of the shareholders is reduced to less than three.
Once the business is dissolved, it shall be situated just for the purpose of clearing the company’s account. The liquidator shall then be appointed to settle the company’s debt.
This article was provided by Siam Legal, an international law firm with offices in Bangkok, Chiang Mai, Hua Hin, Pattaya, Phuket, and Samui. Siam Legal publishes legal guides to setting up a businessin Thailand on its website.
Siam Legal International
Interchange 21 Building, 23rd Floor, 399 Sukhumvit Road
North Klongtoey, Wattana, Bangkok 10110
Tel: 662 259-8100