1. Limited Company
– There must be at least two shareholders. (According to the new law effective from February 7, 2023)
– The capital must be divided into equal shares, with each share valued at not less than 5 baht, totaling a minimum registered capital of 10 baht.
– All shareholders are liable for the company’s debts only up to the unpaid amount of their registered shares. Once the shares are fully paid, shareholders have no further liability for the company’s debts.
– The company must be managed by a board of directors appointed by the shareholders.
2. Limited Partnership
A limited partnership is another form of legal entity registration. The conditions for those who wish to register a limited partnership are as follows:
– There must be at least two partners.
– No minimum capital requirement.
– There are two types of partners:
1. Limited partners — Their liability is limited to the amount of capital they have invested. However, they have no decision-making authority in the business and may only inquire about its operations.
2. General partners — They have unlimited liability for the business’s debts but have full decision-making authority. A managing partner must be a general partner with unlimited liability.
3. Registered Ordinary Partnership
1) An unregistered general partnership is considered an individual entity.
2) A registered general partnership is referred to as a legal entity general partnership.
The conditions for those who wish to register a general partnership as a legal entity are as follows
– No minimum capital requirement.
– All partners must share unlimited liability for the business’s debts. However, all partners have the right to manage the business and share in the profits.
The differences between a limited company, a limited partnership, and a registered general partnership as a legal entity are as follows
Accounting and Tax Responsibilities for Legal Entity Registration
In terms of legal operations after registering as a legal entity, the requirements for a limited company, limited partnership, and registered general partnership are the same, which include:
– Preparing monthly accounts and closing financial statements.
– Hiring an independent, licensed auditor to review the financial statements.
– Filing VAT returns (Form P.P.30) every month if the business is VAT registered, even if there are no transactions in that month.
– Filing withholding tax returns and submitting them to the Revenue Department by the 7th of each month (if there is no withholding, no filing is required).
– Filing corporate income tax returns both semi-annually and annually, with the same corporate tax rate of up to 20% for all three types.
– Submitting social security contributions when the business is registered as an employer and has permanent employees, using Form SSO.1-10 by the 15th of each month.
– Submitting financial statements to the Department of Business Development.
What are the benefits of registering a legal entity?
Increased credibility
– Customers, business partners, and financial institutions will view your business as official.
– Easier to register for VAT, issue tax invoices, and enter into business contracts.Separation of assets and liability
– The company’s assets are separate from personal assets.
– In case of debts or legal issues, liability is limited to the registered capital.Easier business expansion
– It’s easier to raise capital, manage shares, bring in new partners, or sell parts of the business.Access to funding opportunities
– Easier to apply for loans from banks or raise funds from investors compared to an individual business.
– Improved creditworthiness.Tax benefits
– Corporate income tax is a fixed rate (currently 20%).
– More expenses can be deducted, such as wages, benefits, and travel expenses.
– Eligible for certain tax exemptions or investment incentives.Ability to hire employees and maintain accurate accounting
– Can register for social security and officially pay salaries.
– Accounting firms can help manage taxes and finances professionally.”
Tel : 062-652-4259 (Attorney Dr. Ning)
LINE ID : @disavorabuthlaw
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With legal expertise accumulated since 2012, we are trusted professionals you can rely on for all legal matters. Whether it’s civil and commercial law — covering contracts, litigation, and legal proceedings — or labor law that helps your business avoid disputes, we’ve got you covered. We also specialize in family law, inheritance law, consumer protection law, intellectual property law, criminal law, and more. In addition, we offer comprehensive legal consultation and registration services in both Bangkok and Nakhon Ratchasima.
With legal expertise accumulated since 2012, we are trusted professionals you can rely on for all legal matters. Whether it’s civil and commercial law — covering contracts, litigation, and legal proceedings — or labor law that helps your business avoid disputes, we’ve got you covered. We also specialize in family law, inheritance law, consumer protection law, intellectual property law, criminal law, and more. In addition, we offer comprehensive legal consultation and registration services in both Bangkok and Nakhon Ratchasima.