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Thailand offers two types of partnerships for business owners. An ordinary partnership consists of two or more people who share unlimited liability. A limited partnership is a bit different. It also consists of two or more people, but the limited partner has limited liability while the general has unlimited liability.
This can be confusing for business owners, but Plizz is here to help. If you’re interested in setting up a limited partnership in Thailand, let our legal team create and submit the paperwork for you. We can also explain how liability works with a limited partnership.
Many people choose to start a limited partnership due to the benefits. The ordinary partner enjoys the biggest benefit since his or her liability is limited. The ordinary partner is only liable for the capital he or she invested. For example, if the limited partner invests 1 million Baht into the business, he or she can only lose that amount, even if the partnership is found liable for additional expenses.
A limited partnership also offers business owners freedom when operating in Thailand. The Thai government allows limited partnerships to engage in activities without restrictions. Businesses can operate in different industries, although they might need licenses depending on their scope of operations. Plizz can help you obtain the licenses you need, if necessary.
Also, the partners have control regarding allowing new partners to enter the business. All partners must agree on a new partner before he or she can become part of the business.
In addition, this partnership allows up to 49 percent foreign ownership without a foreign business license. This allows foreigners who want to start a business in Thailand to easily team up with nationals to get started. However, if the foreign shareholder owns more than 49 percent of the business, he or she will need to apply for a foreign business license. Fortunately, Plizz can help with that, as well.
Unfortunately, there are also some drawbacks to consider before starting a limited partnership in Thailand. First, the general partner has unlimited liability for the debts and obligations of the partnership. Assume that both partners invest 1 million Baht into the business. The limited partner is only liable for that amount, but the general partner’s liability is not limited. He or she can lose much more money. This puts the general partner at greater risk when operating the business.
Some also view business management as a drawback when operating a limited partnership in Thailand. The general partner has full control of the day-to-day operations. The limited partner cannot assume control of the daily operations without upgrading to a general partner.
Also, unlike an ordinary partnership, partners must file paperwork to set up a limited partnership. In addition, they must go through steps to dissolve the partnership. While many view this as an obstacle, Plizz makes it easy for partners to file the paperwork. The legal team can even help dissolve the partnership if needed.
There are certain requirements in place for setting up a limited partnership in Thailand. First, if the general partner is a foreigner, he or she needs a work permit or a non-immigrant business for business or work purposes. A foreign business license is also needed if a foreign partner invests more than 49 percent into the business.
Thailand’s government requires 2 million Baht in capital to start the business. The partners do not need to contribute equally.
It takes approximately one week to set up a limited partnership in Thailand, as long as the process is done correctly. Many people choose Plizz to ensure that the entire process goes smoothly, so they can start their businesses quickly.
To begin the process, the partners must complete and submit an application for registration to the Direct Registration Office. Along with the application, the partners must settle the applicable fees.
The application is relatively complicated. It must include data and information related to the business. Plizz’s legal team can expertly create this document for you.
If you’re ready to set up a limited partnership, contact Plizz today. You will receive a quote and then can move forward with registering your partnership.