Partnership registration in Bangkok, ThailandsAs defined by Thai Civil and commercial code, partnership is a contract for the organization of partnership business to form an entity whereby two or more persons agree to come together for a common undertaking with an intention of sharing profit, the profit which may be derived therefrom.
Thailand recognize 2 type of partnership entities namely
- Ordinary partnership
- Limited Partnership
In ordinary partnership, all the partners in contract are jointly and equally for liability and debts of partnership. All partners share burden of unlimited liability. Ordinary partners may contribute money, other property or labor to the business.
Ordinary Partnership can be further divided into:
Unregistered Ordinary partnership: Ordinary partnership that is not registered with the respective government office has not status as a juristic person and is treated, for tax purpose, as an individual.
Registered Ordinary partnership: Registered Ordinary Partnership that is registered with commercial registrar are treated as a juristic person and is treated as corporate entity for tax purposes.
The limited Partnership must be registered with respective government office. Limited partnership venture has status as juristic person and is treated, for tax purpose, as a corporate entity.
Basically, when talking about limited partnership firm it must have two kinds of partners
- One or more partner whose individual liability is limited to the amount of capital invested to the partnership
- One or more partners who are jointly and unlimitedly liable for obligations of the partnership.
The partner with unlimited liability can be managing partner of the firm. So, when a limited liability partner interferes with the business activity, the partner automatically becomes unlimited partner bearing unlimited liability regardless of his/her/ their status of being limited partner.
Incorporating Partnership with all Thai partner are hassle free and simple with very less restriction. However, when there is a foreign national involve as the partner of the company Foreign Business Act has to be taken into consideration if the foreigner in investing more than 50% of total investment or be managing partner in the business. Henceforth, to avoid foreign business license requirement foreigners should not invest more than 49% and should not act as a managing partner. On the other hand, if they are not acting as a managing partner, it is less likely that they can protect their interest.