Company Dissolution and Liquidation

|Company Dissolution and Liquidation

In the case of a voluntary dissolution, the first step is to inform all shareholders about the company’s intention to close and formal invitations will be sent to all shareholders and the letter must be published in a local newspaper at least 14 days prior to the shareholders’ meeting.

At least 75% of the shareholders must accept the resolution of dissolving the company. If the resolution is accepted, the shareholders will elect one or more liquidators to register the company’s dissolution with Department of Business Development (DBD) within 14 days of that meeting.  The liquidator can be either the director of the company or a third party. They will also elect an auditor to oversee the process.

The DBD will issue a certificate stating the company’s closing date. Once the liquidator obtains that certificate, he must prepare a balance sheet, certified by a Thai auditor, indicating the current accounts of the company.
After this, the liquidator will announce and hold another meeting in which shareholders may vote the balance sheet and authorize liquidation.

The liquidator must sell company’s assets and take all necessary actions to settle the company’s debts. All company’s creditors will be notified of the company’s dissolution through a letter requesting them to ask for unresolved debts and a notice published in at least one local newspaper.
Creditors will be repaid and the remaining capital will be divided between shareholders according to the percentage of their share. All company’s bank accounts will be closed.

Each employee must receive  severance pay, foreign visas must be cancelled at the Immigration Bureau, and work permits returned to the Ministry of Labor. Employees should be de-registered from the Social Security system.

During this period, a report providing up-to-date accounting of the liquidation process must be submitted every 3 months to the DBD.  This report can be inspected by all creditors and shareholders.

Once all assets have been liquidated, the liquidator prepares a final report and announces a final general meeting of the shareholders by publishing a notice in the local newspaper and mailing it to the shareholders no later than 7 days before the scheduled date of the meeting. On this final meeting, the shareholders must approve the final account prepared by the liquidators. Within 14 days from the date of this meeting, minutes of the meeting should be submitted to the MOC.

Within 60 days from the date the Ministry of Commerce accepts the registration of the dissolution, the company must return its Tax ID Card to the Revenue Department (RD). The company must also return its VAT Registration Certificate (if any) to the RD within 15 days of dissolution and must submit monthly blank VAT returns until the RD confirming their deregistration.

After returning these documents, the liquidating company may request to the RD to send a letter to the DBD, mentioning that the company owes no taxes. Now the liquidator can finalize the company’s liquidation with the DBD and receive a certification that the process has been completed.

The company’s books, accounts, documents will be retained by the DBD and remain available to the public for 10 years. In practice, the Ministry does not keep the books of accounts, but asks the liquidator to keep them.

Within 150 days from the dissolution date, the corporate income tax return must be filed with the Revenue Department and audited financial statements submitted.

The company dissolution process takes between 45 to 90 days depending on the number of years the company has operated and whether its books were properly maintained and tax returns filed as required by law.

2018-08-28T09:39:07+00:00
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