Thailand Civil and Commercial Code Sections-1012-1076

TITLE XXII

PARTNERSHIPS AND COMPANIES

CHAPTER I

GENERAL PROVISIONS

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Section 1012 A contract for the organization of a partnership or company is a contract whereby two or more persons agree to unite for a common undertaking, with a view to sharing the profits which may be derived therefrom.

Section 1013 There are three kinds of partnerships or companies, namely:

1. Ordinary partnerships
2. Limited partnerships
3. Limited companies

Section 1014 Offices for the registration of partnerships and companies shall be established by regulations issued by the Minister responsible for the registration of partnerships and companies.

Section 1015 A partnership or company, upon registration according to the provisions of this Title, continues as a juristic person distinct from the partners or shareholders of whom it is composed.

Section 1016 The registration must be made at the Registration Office of that part of the kingdom where the principal business office of the partnership or company is situated. Any alterations subsequently made in the registered particulars, as well as any other matters ordered or allowed to be registered by this Title, must be registered at the same place.

Section 1017 If a fact to be registered or published happens in a foreign country, the period for its registration or publication shall be computed from the time when notice thereof arrives at the place of registration or publication.

Section 1018 There shall be paid in respect of registration such fees as may be provided by the regulations issued by the competent Minister.

Section 1019 If an applicant for registration or a document subject to registration does not contain all the particulars required by this Title to be mentioned in it, or if any of the particulars mentioned in such application or document are contrary to law, or if any of the documents prescribed to be deposited with it are not produced, or if any other condition imposed by law is not complied with, the Registrar may decline to make any entry in his register until the application or documents are completed or modified, or until the prescribed documents are produced, or until the condition is fulfilled.

Section 1020 Every person is entitled to inspect the documents kept by the Registrar, or to require a certificate of the registration of any partnership or company, or a certified copy or extract of any other document, to be delivered to him by the Registrar, on payment of such fee as may be prescribed by the regulations issued by the competent Minister.

Section 1021 Every Registrar shall cause to be published periodically in the Government Gazette, in the form provided by the competent Minister, a summary of the entries made in his register.

Section 1022 On such publication being made, the registered documents or matters referred to in the summary shall be deemed to be known to all persons, whether connected with the partnership or company or not.

Section 1023 Until such publication has been made, no advantage may be taken by the partners, the partnership, or the company against third persons of the existence of the agreements, documents, or particulars required by this Title to be registered, but third persons may take advantage of such existence. However, the partners or shareholders who, and the partnership or company which, has received performance of an obligation before such publication, is bound by the performance.

Section 1024 As between the partners or shareholders, the partners and the partnership, the shareholders and the company, all books, accounts, and documents of any partnership or company or of the liquidators of any partnership or company are presumed to be correct evidence of all matters therein recorded.

CHAPTER II

ORDINARY PARTNERSHIPS

 PART I

Definition

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Section 1025 An ordinary partnership is a type of partnership where all partners are jointly and unlimitedly liable for all the obligations of the partnership.

 

PART II

Relation of Partners between Themselves

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Section 1026 Each partner must contribute to the partnership. This contribution may consist of money, other properties, or services.

Section 1027 In case of doubt, contributions are presumed to be of equal value.

Section 1028 If a partner’s contribution consists solely of personal services and the partnership agreement does not specify the value of such services, the share of that partner in the profits is equivalent to the average of the shares of partners whose contributions are in money or other properties.

Section 1029 If a partner contributes the use of a property, the relations between such partners and the partnership regarding delivery, repairs, liability for defects, liability for eviction, and clauses of non-liability are governed by the provisions of this Code concerning the Hire of Property.

Section 1030 If a partner contributes ownership of a property, the relations between such partners and the partnership regarding delivery, repairs, liability for defects, liability for eviction, and clauses for non-liability are governed by the provisions of this Code concerning Sale.

Section 1031 If a partner completely fails to deliver their contribution, a written notice must be sent to them by registered letter to deliver it within a reasonable time. Failing this, the partner may be excluded from the partnership by a decision of all other partners or by such majority as provided in the partnership agreement.

Section 1032 No changes to the original partnership or the nature of the business may be made except with the consent of all partners, unless otherwise agreed upon.

Section 1033 If no specific agreement exists among partners regarding the management of the partnership’s business, each partner may manage the business individually, provided that no partner enters into a contract objected to by another partner. In such cases, each partner acts as a managing partner.

Section 1034 If it is agreed that decisions relating to the business of the partnership shall be made by a majority of partners, each partner shall have one vote regardless of the amount of their contribution.

Section 1035 If it is agreed that the partnership’s business shall be managed by several managing partners, each managing partner may manage the business, provided that no managing partner acts against the objection of another managing partner.

Section 1036 Managing partners may only be removed from their position with the consent of all other partners, unless otherwise agreed upon.

Section 1037 Even if partners have agreed that the partnership’s business shall be managed by one or more managing partners, each non-managing partner has the right to inquire into the management of the business at any time, and to inspect and copy any of the partnership’s books and documents.

Section 1038 No partner may, without the consent of other partners, engage in any business of the same nature as and competing with that of the partnership. If a partner acts contrary to this provision, the other partners are entitled to claim from that partner all profits made or compensation for the injury suffered by the partnership. However, such claims cannot be made later than one year after the date of the violation.

Section 1039 A partner is obligated to manage the partnership’s business with the same care as they would their own business.

Section 1040 No person may be admitted as a partner in the partnership without the consent of all partners, unless otherwise agreed upon.

Section 1041 If a partner transfers their share in the profits of the partnership, in whole or in part, to a third person without the consent of the other partners, such third person does not become a partner.

Section 1042 The relations of managing partners with other partners are governed by the provisions of this Code concerning Agency.

Section 1043 If a non-managing partner manages the partnership’s business or if a managing partner exceeds their authority, the provisions of this Code concerning Management of Affairs without Mandate shall apply.

Section 1044 Each partner’s share in the profits or losses is in proportion to their contribution.

Section 1045 If a partner’s share is fixed only as to profits or only as to losses, it is presumed to be the same proportion for both profits and losses.

Section 1046 A partner is not entitled to remuneration for managing the partnership’s business unless otherwise agreed upon.

Section 1047 If the name of a partner who has ceased to be a member is used in the firm name, they have the right to demand that such use cease.

Section 1048 A partner may claim a share even in transactions where their name did not appear.

PART III

Relation of Partners with Third Persons

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Section 1049 No partner can acquire any right against third persons through a transaction where their own name did not appear.

Section 1050 All partners are bound by the acts performed by any of them in the ordinary course of the partnership business and are jointly and unlimitedly liable for the performance of obligations incurred in such management.

A partner whose membership has ceased remains liable for obligations incurred by the partnership before they became a partner.

Section 1052 A person who becomes a member of a partnership is liable for any obligations incurred by the partnership before they became a partner.

Section 1053 Restrictions on the power of a member of a non-registered partnership to bind other partners have no effect with respect to third persons.

Section 1054 A person who, by spoken or written words, conduct, or consenting to the use of their name in the partnership firm name, represents themselves or knowingly allows themselves to be represented as a member of a partnership becomes liable to third persons as a partner for all partnership obligations. After the death of a partner, if the partnership business continues under the old firm name, the continued use of that name or of the deceased partner does not in itself make the deceased partner’s estate liable for any obligations incurred by the partnership after their death.

PART IV

Dissolution and Liquidation of Ordinary Partnerships

 

Section 1055 An ordinary partnership is dissolved:

1. In cases provided by the partnership contract.
2. If formed for a definite period, by the expiration of that period.
3. If formed for a single undertaking, by the termination of that undertaking.
4. By any partner giving due notice as provided in Section 1056.
5. By the death of any partner or by any partner becoming bankrupt or incapacitated.

Section 1056 If a partnership is entered into for an indefinite period, it can only be terminated by a partner at the end of a financial year of the partnership. Such partner must give at least six months’ notice of their intention to terminate.

Section 1057 An ordinary partnership may also be dissolved by the court on application by a partner in any of the following cases:

When a partner, other than the suing partner, willfully or by gross negligence violates any essential obligation imposed by the partnership contract.

When the partnership business can only be carried on at a loss with no prospect of recovery.

When any other cause makes the continuation of the partnership impossible.

Section 1058 Upon an event occurring that entitles the remaining partners to demand dissolution under Section 1057 or Section 1067, the court may, upon the application of the remaining partners, order instead the expulsion of the partner in question. For the purpose of property division between the partnership and the expelled partner, the partnership property must be assessed and valued as it stood at the time of the expulsion application.

Section 1059 If at the expiration of an agreed period, the partnership business continues without settlement or liquidation accounts by the partners or those habitually managing it, the partners are deemed to have agreed to continue the partnership indefinitely.

Section 1060 In cases under Section 1055(4) or (5), if remaining partners purchase the share of the partner whose membership ceased, the partnership contract continues between the remaining partners.

Section 1061 After dissolution of a partnership, liquidation must take place unless another method of property adjustment between the partners is agreed upon or the partnership is adjudicated bankrupt. If dissolution is due to a creditor’s notice or partner’s bankruptcy, liquidation can only be waived with consent of the creditor or official receiver. Liquidation is carried out by all partners or persons appointed by them. The appointment of liquidators is decided by a majority vote of the partners.

Section 1062 Liquidation must proceed in the following order:

1. Fulfillment of obligations towards third persons.
2. Reimbursement of advances and expenses incurred by partners in managing the partnership business.
3. Return of contributions made by each partner. Any remaining balance is distributed as profit among the partners.

Section 1063 If, after fulfilling obligations towards third persons and reimbursing advances and expenses, the assets are insufficient to fully return partners’ contributions, the deficiency constitutes a loss to be shared among partners.

PART V

Registration of Ordinary Partnerships

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Section 1064 An ordinary partnership may be registered. The entry in the register must include:

1. The partnership’s firm name.
2. Its object.
3. The address of the principal and branch offices.
4. Full names, addresses, and occupations of every partner; if a partner has a trade name, it must be included.
5. Names of managing partners, if fewer than all partners are appointed as such.
6. Restrictions on managing partners’ powers, if any.
7. Seals binding on the partnership.

The entry is signed by every partnership member and sealed with the partnership’s common seal. A registration certificate is issued to the partnership.

Section 1064/1 A managing partner of a registered partnership wishing to resign must tender their resignation letter to any other managing partner. The resignation takes effect when the letter reaches the other managing partner. If the partnership has only one managing partner, they must notify any other partner of their intention in writing, along with the resignation letter, to convene a meeting to appoint a new managing partner. The resignation takes effect when the letter reaches the other partner. The resigning managing partner may notify the Registrar of their resignation.

Section 1064/2 Upon a change of managing partner, a registered partnership must register the change within fourteen days.

Section 1065 A partner can enforce against third persons any rights acquired by the registered partnership, even if their name did not appear in the transaction.

Section 1066 No partner of a registered partnership may, without consent of all other partners, engage in any business of the same nature as and competing with the partnership’s business. This prohibition does not apply if partners were aware at the time of registration that one of them was engaged in a similar business, and such withdrawal was not stipulated in the partnership contract.

Section 1067 If a partner acts contrary to Section 1066, the registered partnership is entitled to claim from them all profits made or compensation for damages suffered. Such claim cannot be made later than one year after the date of the violation. These provisions do not affect the rights of remaining partners to demand dissolution of the partnership.

Section 1068 A partner’s liability in respect to obligations incurred by the partnership before ceasing membership is limited to a period of two years after ceasing to be a member.

Section 1069 In addition to cases under Section 1055, a registered partnership is dissolved if it becomes bankrupt.

Section 1070 A creditor of an obligation due by a registered partnership may demand performance from any partner as soon as the partnership defaults.

Section 1071 If a partner proves:

1. Partnership assets are sufficient to fulfill all or part of the obligation.
2. Enforcement against the partnership would not be difficult.

The court may order that the obligation be enforced against partnership assets.

Section 1072 As long as a registered partnership is not dissolved, creditors of a partner may only claim against profits or sums due to that partner. After dissolution, creditors may claim against the partner’s share in partnership assets.

PART VI

Amalgamation of Registered Partnerships

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Section 1073 A registered partnership may amalgamate with another registered partnership with the consent of all partners, unless there is an agreement providing otherwise.

Section 1074 When a registered partnership decides to amalgamate, it must publish at least twice in a local newspaper and send a notice of the proposed amalgamation to all known creditors. The notice requires creditors to present any objections within three months from the date of notice. If no objections are raised during this period, none are deemed to exist. If objections are raised, the partnership may proceed with amalgamation only after satisfying the claim or providing security for it.

Section 1075 After amalgamation, each partnership must ensure registration of the amalgamation as a new partnership.

Section 1076 The new partnership is entitled to the rights and subject to the liabilities of the amalgamated partnerships.

 

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