A Private Limited Company is governed by the Civil and Commercial Code and has similar characteristics with those of the Western corporations. A private limited company is formed through a process that leads to the registration of a Memorandum of Association (Articles of Incorporation) and Articles of Association (By- laws) as its constitutive documents.
A private limited company must have at least three shareholders at all times, otherwise it risks a court order for dissolution. The shareholders enjoy limited liability. However, the liability of the directors may be unlimited if stipulated as such in the company’s MOA.
Under this form, a Thai person or company by genuine investment (Thai business partner) will hold no less than 51% of the company’s shares (control can be maintained by the foreign shareholder however). As a Thai company, it can engage in all kind of activities. There is no requirement to have a Thai director, except for some business activities which specific operating licenses are required. Therefore, the company can be run and maintained by one or more foreign directors with valid work permits.