Steps to closing down your Thai company
Despite your best efforts at running your Thai company successfully, sometimes closing it could be the only viable option. Some of the reasons that could lead to closing down your business include losses, inability to carry out business operations, stiff competition, and market instability.
However, closing a Thai company can be a complex process. There are several steps to follow to ensure you lawfully close the company. Otherwise, you risk damaging your reputation and even losing your finances and personal assets.
Hold a shareholders meeting
First off, you need to convene a shareholders’ meeting to pass a special resolution to liquidate the company. At least 75% of the shareholders must support the decision to dissolve the company. Be sure to send an invitation for the meeting to the shareholders at least 14 days before the appointed date.
You should publish the invitation to the Local Newspaper delivery service to ensure the shareholders acknowledge its receipt. Once the resolution of closing down the company is passed, at least one liquidator should be appointed to represent the company and its stakeholders in liquidating the company.
File with the Ministry of Commerce
Once you finalize the decision to dissolve the company and adjourned the shareholders’ meeting, you have to file an application to the Ministry of Commerce. You’ll need to submit the registration forms and supporting documents for the business liquidation to the Department of Business Development (DBD).
Notify relevant government offices
Another important step in closing a business in Thailand is to deregister from local authorities. You have to notify the Social Security office of your company’s current situation. You must also deregister your business with the Revenue Departments.
After the deregistration, the revenue department will approve the dissolution process if your company doesn’t have any payable pending taxes. If you had applied for any special government licenses, make sure you cancel them as well and return them to the respective government authorities.
Submit your final balance sheets
It is important to prepare and complete your company’s accounts of the current accounting period up to the closing date. The financial statements must be audited by a Thai auditor. If the business is registered with the VAT system, make sure you return the VAT Registration Certificate to the Revenue Department.
You must return the company’s Tax I.D. to the Revenue Department as well. Another important thing is to clear the company’s debts. Then you can return the remaining cash to the shareholders.
Cancel any Non-B visas and Work Permits
If some of your staff are non-Thai citizens, the law requires that you give them a termination letter once their employment comes to an end. They should take the letter to the labor office to cancel their work permit.
This must be done on the same day they receive they receive their termination letters. The labor office will give them a receipt for canceling their work permits. They should take the receipt to the nearest immigration office to cancel their Non-B visas with immediate effect.
Conclusion
Closing a Thai company is just as important as setting it up. The same careful considerations apply to the start and the end of your business. This is important to avoid finding yourself on the wrong side of the law, risking your reputation and assets.
However, the process can be complex and tedious that you may not be able to handle it all by yourself. It is advisable to contract a reputable legal firm that can help you handle all the legal procedures for closing your Thai company.
