At the end of a life cycle of a private limited liability company in Thailand it is necessary to liquidate and dissolve the company by resolution of its shareholders. The procedure, has to follow the rules of the Sections 1247 – 1273 of the Civil and Commercial Code of Thailand (CCC). To proceed with the dissolution and liquidation of the company under the provisions of the CCC, the shareholders are required to do the following:
- The Board of Directors shall hold a meeting to adopt a resolution related to the planned liquidation of the company. Then, two shareholder meetings need to be summoned, to give the shareholders the opportunity to discuss the matter. the formality of such meetings will follow the company's bylaws.
- In the first General meeting, a special resolution of shareholders to liquidate and dissolve the company shall be set up. Therefore, the shareholders need to appoint a liquidator and an auditor.
- In the second meeting of shareholders, the resolution of the first meeting – to liquidate and dissolve the company – needs to be confirmed. This second meeting has to be held between 14 days and 6 weeks after the first meeting if not a more extended period is required by the articles of association of the corporation.
- The company shall place two succeeding advertisements in a local newspaper and send letters to all creditors by registered letter to announce the liquidation of the company. So, the creditors can settle their claims with the company before the dissolution.
- All relevant documents need to be submitted within 14 days from the date of the second company meeting to the Commercial Registration Department, Company and Partnership Registration Office and Ministry of Commerce.
- The financial statement (Balance Sheet, accounts) prepared and certified by the appointed auditor needs to be approved by a further meeting of shareholders and submitted to the Ministry of Commerce.
- The liquidator is required to provide a report to the Ministry of Commerce every three months until all assets and liabilities are cleared, and all debtors are urged to settle their debts. At the end of this process, the liquidator shall set up a final meeting of shareholders to approve the liquidation of the company. Meeting minutes shall be forwarded to the Ministry of Commerce within 14 days from the date of the meeting.
- After the final assembly, an application for liquidation of the company must be sent to the Thai Revenue Department and the original Value Added Tax Certificate as well as the original Tax Identification Card needs to be returned in the company's name.
- In order to obtain the final approval of the company's liquidation by the Ministry of Commerce, a copy of the approval of the liquidation by the Thai Revenue Department has to be sent to the Ministry.
- It is the Liquidators duty to deposit all the company's books at the Registrar's office, where they shall be stored for 10 years, beginning from the date of the final approval of the liquidation. In practice, the liquidator is asked to archive the books by himself and confirm this to the Registrar in writing.
The entire process of liquidation process takes about 1 – 2 years, depending on the period, the company was operating, the condition of the books and whether tax returns were all duly submitted as required by law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.