Thailand Civil and Commercial Code Sections-1077-1207

CHAPTER III 

LIMITED PARTNERSHIPS

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Section 1077 A limited partnership is a partnership where:

1. One or more partners have limited liability, contributing only up to a specified amount.
2. One or more partners have unlimited liability for all partnership obligations.

Section 1078 A limited partnership must be registered. The entry in the register must include:

1. The firm name of the partnership.
2. A statement that the partnership is a limited partnership and its purpose.
3. The address of the principal and branch offices.
4. Full names, trade names, addresses, and occupations of partners with limited liability, along with their respective contributions.
5. Full names, trade names, addresses, and occupations of partners with unlimited liability.
6. Names of managing partners.
7. Restrictions, if any, on the powers of managing partners to bind the partnership.

The entry may include any other relevant details deemed necessary by the parties. It must be signed by every member of the partnership and sealed with the partnership’s common seal. A registration certificate is issued to the partnership.

Section 1078/1 A managing partner wishing to resign must submit their resignation letter to any other managing partner. The resignation takes effect when the letter reaches the recipient. If the limited partnership has only one managing partner who wishes to resign, they must notify another partner in writing, along with the resignation letter, to convene a meeting for appointing a new managing partner. The resignation takes effect when the letter reaches the recipient. The resigning managing partner may notify the Registrar of their resignation.

Section 1078/2 Upon a change of managing partner, the limited partnership must register the change within fourteen days.

Section 1079 Until registration, a limited partnership is treated as an ordinary partnership where all partners are jointly and unlimitedly liable for all partnership obligations.

Section 1080 Provisions applicable to ordinary partnerships also apply to limited partnerships unless otherwise specified in this Chapter III. If multiple partners have unlimited liability, the rules of an ordinary partnership apply to their relationships with each other and with the partnership.

Section 1081 The firm name of a limited partnership may not include the names of partners with limited liability.

Section 1082 A partner with limited liability who consents, either expressly or impliedly, to the use of their name in the firm name is liable to third parties as if they were a partner with unlimited liability. Internally among partners, their liability remains governed by the partnership contract.

Section 1083 Contributions of partners with limited liability must be in money or other property.

Section 1084 No dividends or interest may be distributed to partners with limited liability except from profits earned by the partnership. If partnership capital is reduced due to losses, no dividends or interest may be distributed to partners with limited liability until losses are covered. However, a partner with limited liability cannot be required to return dividends or interest received in good faith.

Section 1085 If a partner with limited liability informs third parties, by letter, circular, or otherwise, that their contribution is greater than the registered amount, they become liable for the higher amount.

Section 1086 Agreements among partners to alter the nature or reduce the amount of a contribution by a partner with limited liability are ineffective against third parties until registered. Once registered, they apply only to obligations incurred by the partnership after registration.

Section 1087 Management of a limited partnership is the responsibility of partners with unlimited liability only.

Section 1088 If a partner with limited liability interferes in partnership management, they become jointly and unlimitedly liable for all partnership obligations. Voting for manager appointments or dismissals, as per the partnership contract, does not constitute interference.

Section 1089 A partner with limited liability may be appointed as a liquidator of the partnership.

Section 1090 Partners with limited liability may engage in any business, whether on their own behalf or on behalf of third parties, even if the business competes with that of the partnership.

Section 1091 Partners with limited liability may transfer their shares without the consent of other partners.

Section 1092 Unless stated otherwise in the partnership contract, a limited partnership is not dissolved by the death of a partner with limited liability or their bankruptcy or incapacity.

Section 1093 If a partner with limited liability dies, their heirs become partners unless otherwise specified in the contract.

Section 1094 If a partner with limited liability becomes bankrupt, their partnership share must be sold as part of the bankruptcy estate.

Section 1095 Creditors of a limited partnership cannot take action against partners with limited liability while the partnership exists. After dissolution, creditors can take action against each partner with limited liability for:

1. The undelivered portion of their contribution.
2. Any portion of their contribution withdrawn from partnership assets.
3. Dividends and interest received in bad faith and contrary to Section 1084.

CHAPTER IV

LIMITED COMPANIES

PART I

Nature and Formation of Limited Companies

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Section 1096 A limited company is that kind which is formed with the capital divided into shares, and the liability of the shareholders is limited to the amount, if any, unpaid on the shares respectively held by them.

Section 1096 bis (Repealed)

Section 1097 Any three or more persons may, by subscribing their names to a memorandum and otherwise complying with the provisions of this Code, promote and form a limited company.

Section 1098 The memorandum must contain the following particulars:

1. The name of the proposed company, which must always end with the word “limited”.
2. The part of the Kingdom in which the registered office of the company shall be situated.
3. The objects of the company.
4. A declaration that the liability of the shareholders shall be limited.
5. The amount of share capital with which the company proposes to be registered, and the divisions thereof into shares of a fixed amount.
6. The names, addresses, occupations, and signatures of the promoters, and the number of shares subscribed by each of them.

Section 1099 The memorandum must be made in at least two original copies and signed by the promoters, with the signatures certified by two witnesses. One copy of the memorandum must be deposited and registered at the Registration Office of the part of the Kingdom where the registered office of the company is situated.

Section 1100 Every promoter must subscribe to at least one share.

Section 1101 The liability of the directors of a limited company may be unlimited. In such a case, a statement to that effect must be inserted in the memorandum. The unlimited liability of a director terminates two years after the date at which he ceased to hold office.

Section 1102 No invitation to subscribe for shares shall be made to the public.

Section 1103 (Repealed)

Section 1104 The total number of shares with which the company proposes to be registered must be subscribed or allotted before registration of the company.

Section 1105 Shares may not be issued at a lower price than their nominal amount. The issue of shares at a higher price than their nominal amount is permissible if sanctioned by the memorandum. In such a case, the excess amount must be paid together with the first payment. The first payment on the shares must not be less than twenty-five percent of their nominal amount.

Section 1106 A person, by subscribing for shares, binds himself, on condition that the company be formed, to pay to the company the amount of such shares in conformity with the prospectus and regulations.

Section 1107 When all the shares to be paid in money have been subscribed, the promoters must without delay hold a general meeting of subscribers, which shall be called the statutory meeting. The promoters shall, at least seven days before the day on which the meeting is to be held, forward to every subscriber a statutory report, duly certified by them, containing the particulars of the business to be transacted at the statutory meeting under the following section. The promoters shall cause a copy of the statutory report, certified as required by this section, to be filed with the Registrar of companies forthwith after sending it to the subscribers. The promoters shall also cause a list showing the names, descriptions, and addresses of the subscribers, and the number of shares subscribed by them respectively, to be produced at the meeting. The provisions of Sections 1176, 1187, 1188, 1189, 1191, 1192, and 1195 shall apply mutatis mutandis to the statutory meeting.

Section 1108 The business to be transacted at the statutory meeting:

1. The adoption of the regulations of the company, if any.
2. The ratification of any contracts entered into and any expenses incurred by the promoters in promoting the company.
3. The fixing of the amount, if any, to be paid to the promoters.
4. The fixing of the number of preference shares, if any, to be issued, and the nature and extent of the preferential rights accruing to them.
5. The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up otherwise than in money, if any, and the amount up to which they shall be considered as paid-up. The description of the service or property in return for which such ordinary shares or preference shares shall be allotted as paid-up shall be expressly laid down before the meeting.
6. The appointment of the first directors and auditors and the fixing of their respective powers.

Section 1109 A promoter or a subscriber who has a special interest in a resolution cannot exercise the right of voting. No resolution of the statutory meeting is valid unless passed by a majority including at least one half of the total number of subscribers entitled to vote, and representing at least one half of the total number of shares of such subscribers.

Section 1110 After the statutory meeting is held, the promoters shall hand over the business to the directors. The directors shall thereupon cause the promoters and subscribers to pay forthwith upon each share payable in money such amount, not less than twenty-five percent, as provided by the prospectus, notice, advertisement, or invitation.

Section 1111 When the amount mentioned in Section 1110 has been paid, the directors must apply for the registration of the company. The application and entry in the register must contain, in conformity with the decisions of the statutory meeting, the following particulars:

1. The total number of shares subscribed or allotted, distinguishing ordinary shares and preference shares.
2. The number of ordinary shares or preference shares allotted as fully or partly paid-up otherwise than in money, and in the latter case, the extent to which they are so paid up.
3. The amount already paid in money on each share.
4. The total amount of money received in respect of shares.
5. The names, occupations, and addresses of the directors.
6. If the directors have power to act separately, their respective powers and the number or names of the directors whose signature is binding on the company.
7. The period, if any has been fixed, for which the company is formed.
8. The address of the principal business office and of all branch offices.

The entry may contain any other particulars which the directors may deem expedient to make to the public. The application must be accompanied by a copy of the regulations, if any, and of the proceedings of the statutory meeting, both certified by the signature of at least one director. The directors must at the same time deposit with the Registration Office ten printed copies of the memorandum and of the regulations, if any, of the company. A certificate of registration shall be delivered to the company.

Section 1111/1 In forming a company, the directors may, upon completing all the following steps on the day the memorandum of association is made by the promoters:

1. Have all shares to be registered by the company subscribed.
2. Hold a statutory meeting to consider the business as provided in Section 1108, the meeting being attended by all promoters and subscribers and the business to be transacted at the meeting being approved by all promoters and subscribers.
3. Have the promoters hand over the business to the directors.
4. Have the directors cause the subscribers to pay the amount for each share as provided in Section 1110, paragraph two, and the amount is actually paid.

Section 1112 If registration does not take place within three months after the statutory meeting, the company is not formed, and all the money received from the applicants must be repaid without deduction. If any such money has not been so repaid within three months after the statutory meeting, the directors of the company are jointly liable to repay that money with interest from the expiration of the three months. Provided that a director shall not be liable for repayment of interest if he proves that the loss of money or delay was not due to his fault.

Section 1113 The promoters of the company are jointly and unlimitedly liable for all obligations and disbursements not approved by the statutory meeting; even if approved, they remain so liable until the registration of the company.

Section 1114 After a company is registered, a subscriber of shares cannot enter a claim for cancellation by the Court of his subscription on the ground of mistake, duress, or fraud.

Section 1115 If the name inserted in a memorandum is identical with the name of an existing registered company or with the name inserted in a registered memorandum, or so nearly resembling the same as to be likely to deceive the public, any interested person can enter a claim for compensation against the promoters of the company and can ask for an order from the Court that the name be changed. Upon such order being made, the new name must be registered in the place of the former name, and the certificate of registration must be altered accordingly.

Section 1116 Any interested person is entitled to obtain from any company a copy of its memorandum and registration, for which a sum not exceeding one baht per copy may be charged by the company.

 

PART II: Shares and Shareholders

 

Section 1117 The amount of a share may not be less than five baht.

Section 1118 Shares are indivisible. If a share is held by two or more persons in common, they must appoint one of them to exercise their rights as shareholders. Persons holding a share in common are jointly liable to the company for payment of the amount of the share.

Section 1119 The whole amount of every share must be paid in money, except shares allotted under Section 1108 subsection 5, or under Section 1221. A shareholder cannot avail himself of a set-off against the company as to payments on shares.

Section 1120 Unless otherwise decided by a general meeting, the directors may make calls upon the shareholders in respect of all money due on their shares.

Section 1121 Twenty-one days’ notice at least must be given by registered letter of each call, and each shareholder must pay the amount of such call to the person and at the time and place fixed by the directors.

Section 1122 If the call payable in respect of any share has not been paid on the day fixed for payment thereof, the holder of such share is bound to pay interest from the day fixed for payment to the time of the actual payment.

Section 1123 If a shareholder fails to pay a call on the day fixed for payment thereof, the directors may give him notice by registered letter to pay such call with interest. The notice must fix a reasonable time within which such call and interest must be paid. It must also fix the place where payment must be made. The notice may also state that in the case of non-payment, the share in respect of which such call was made may be forfeited.

Section 1124 If a statement as to forfeiture has been made in the notice, the directors may, as long as the call and interest remain unpaid, declare the shares to be forfeited.

Section 1125 Shares forfeited must be sold without delay by public auction. The proceeds must be applied to the payment of the call and interest due. Any surplus must be returned to the shareholder.

Section 1126 The title of the purchaser of the forfeited share is not affected by any irregularity in the proceedings of such forfeiture and sale.

Section 1127 A certificate of shares shall be delivered to each shareholder for the shares held by him. The delivery of a certificate may be subject to the payment of such fee, not exceeding fifty satang, as the directors may decide.

Section 1128 Every certificate of shares shall be signed by at least one of the directors and shall bear the seal of the company. It must contain the following particulars:

1. The name of the company.
2. The numbers of the shares to which it applies.
3. The amount of each share.
4. In the case where shares are not fully paid up, the amount paid on each share.
5. The name of the shareholder or a statement that the certificate is to bearer.

Section 1129 Shares are transferable without the assets of the company unless, in the case of shares entered in a name certificate, it is otherwise provided in the regulations of the company. The transfer of shares entered in a name certificate is void unless made in writing and signed by the transferor and the transferee, whose signatures shall be certified by at least one witness. Such transfer is invalid as against the company and third persons until the fact of the transfer and the name and address of the transferee are entered in the register of shareholders.

Section 1130 The company may decline to register a transfer of shares on which a call is due.

Section 1131 The transfer book may be closed during fourteen days immediately preceding the ordinary general meeting.

Section 1132 If by some event such as the death or bankruptcy of any shareholder, another person becomes entitled to a share, the company shall, on surrender of the share certificate when possible and on proper evidence being produced, register such other person as a shareholder.

Section 1133 The transferor of a share not fully paid up continues to be liable for the full amount unpaid thereon, provided that:

1. No transferor shall be liable in respect of any obligation of the company incurred after the transfer.
2. No transferor shall be liable to continue unless it appears to the Court that the existing shareholders are unable to satisfy the contributions required to be made by them. No action against the transferor for such liability can be entered later than two years after the transfer has been entered in the register of shareholders.

Section 1134 Certificates to bearer may be issued only if authorized by the regulations of the company and for shares which are fully paid up. In such a case, the holder of a name certificate is entitled to receive a certificate to bearer on surrendering the name certificate for cancellation.

Section 1135 Shares entered in a certificate to bearer are transferred by the mere delivery of the certificate.

Section 1136 The holder of a certificate to bearer is entitled to receive a name certificate on surrendering the certificate to bearer for cancellation.

Section 1137 If it is prescribed by the regulations of the company that a director must hold a certain number of shares of the company as a qualification for such office, such shares must be shares entered in a name certificate.

Section 1138 Every limited company must keep a register of shareholders containing the following particulars:

1. The names, addresses, and occupations, if any, of the shareholders, a statement of the shares held by each shareholder, distinguishing each share by its number, and of the amount paid or agreed to be considered as paid on the shares of each shareholder.
2. The date at which each person was entered in the register as a shareholder.
3. The date at which each shareholder ceased to be a shareholder.
4. The numbers and date of certificates issued to bearer, and the respective numbers of shares entered in each such certificate.
5. The date of cancellation of any name certificate or certificate bearer.

Section 1139 The register of shareholders commencing from the date of the registration of the company shall be kept at the registered office of the company. It shall be gratuitously open to inspection by the shareholders during business hours, subject to such reasonable restrictions as the directors may impose, but not less than 2 hours a day. It shall be the duty of the directors to send, once at least in every year to the Registrar, and not later than on the fourteenth day after the ordinary meeting, a copy of the list of all shareholders at the time such meeting and those who have ceased to be shareholders since the date of the last ordinary meeting. Such list shall include all particulars specified in the foregoing section.

Section 1140 Any shareholder is entitled to require a copy of such register or of any part thereof to be delivered to him on payment of fifty satang for every hundred words required to be copied.

Section 1141 The register of shareholders is presumed to be correct evidence of any matters directed or authorized by law to be inserted therein.

Section 1142 If preference shares have been issued, the preferential rights attributed to such shares cannot be altered.

Section 1143 A limited company may not own its own shares or take them in pledge.

 

Management of Limited Companies

1. GENERAL PROVISIONS

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Section 1144 Every limited company shall be managed by a director or directors under the control of the general meeting of shareholders and according to the regulations of the company.

Section 1145 After registration of the company, no regulations may be made and no additions to or alterations of the regulations or of the contents of the memorandum may be adopted except by passing a special resolution.

Section 1146 It shall be the duty of the company to cause every new regulation, addition, or alteration to be registered within fourteen days after the date of the special resolution.

Section 1147 Repealed.

Section 1148 Every limited company may have a registered office to which all communications and notices may be addressed. Notice of the situation of the registered office and of any change therein shall be given to the Registrar of Companies, who shall record the same.

Section 1149 As long as the shares have not been fully paid up, the company may not print or mention the capital of the company in any notice, advertisement, bills, invoices, letters, or other documents, without clearly mentioning at the same time what proportion of such capital has been paid up.

 

2. DIRECTORS

 

Section 1150 The number and remuneration of the directors shall be fixed by a general meeting.

Section 1151 A director can be appointed or removed only by a general meeting.

Section 1152 At the first ordinary meeting after the registration of the company and at the first ordinary meeting in every subsequent year, one-third of the directors, or, if their number is not a multiple of three, then the number nearest to one-third must retire from office.

Section 1153 Any director who wishes to resign from his post shall tender his resignation letter to the company. The resignation shall take effect from the date the resignation letter reaches the company. The director who resigns under this paragraph may notify the Registrar of his resignation.

Section 1154 If a director becomes bankrupt or incapacitated, his office is vacated.

Section 1155 Any vacancy occurring in the board of directors otherwise than by rotation may be filled up by the directors, but any person so appointed shall retain his office for such time only as the vacating director was entitled to retain the same.

Section 1156 If a general meeting removes a director before the expiration of his period of office and appoints another person in his stead, the person so appointed shall retain his office for such time only as the removed director was entitled to retain the same.

Section 1157 When there is a change of a director or directors, the company shall effect the registration thereof within fourteen days from the date of such change.

Section 1158 Unless otherwise provided by the regulations of the company, the directors have the powers described in the six following sections.

Section 1159 The subsisting directors may act notwithstanding any vacancy among them but, if and so long as their number is reduced below the number necessary to form a quorum, the subsisting directors may act for the purpose of increasing the number of directors to that number, or of summoning a general meeting of the company but for no other purpose.

Section 1160 The directors may fix the quorum necessary for the transaction of business at their meetings and unless so fixed the quorum shall (when the number of directors exceeds three) be three.

Section 1161 Questions arising at any meeting of directors are decided by a majority of votes; in case of an equality of votes, the chairman has a casting vote.

Section 1162 A director may at any time summon a meeting of directors.

Section 1163 The directors may elect a chairman of their meetings, and fix the period for which he is to hold office, but if no such chairman is elected, or if at any meeting the chairman is not present at the time appointed for holding the same, the directors present may choose one of their members to be chairman of such meeting.

Section 1164 The directors may delegate any of their powers to managers or to committees consisting of members of their body. Every manager or committee shall, in the exercise of the power so delegated, conform to any order or regulation that may be imposed on them by the directors.

Section 1165 Unless otherwise provided by the delegation, questions arising at any meeting of a committee shall be decided by a majority of votes of the members; in case of an equality of votes, the chairman has a casting vote.

Section 1166 All acts done by a director shall, notwithstanding that it be afterwards discovered that there was some defect in his appointment, or that he was disqualified, be as valid as if such person had been duly appointed and was qualified to be a director.

Section 1167 The relations between the directors, the company, and third persons are governed by the provisions of this Code concerning Agency.

Section 1168 The directors must, in their conduct of the business, apply the diligence of a careful businessman. In particular, they are jointly responsible:

For the payment of shares by the shareholders being actually made;

For the existence and regular keeping of the books and documents prescribed by law;

For the proper distribution of the dividend or interest as prescribed by law;

For the proper enforcement of resolutions of the general meetings.

A director must not, without the consent of the general meeting of shareholders, undertake commercial transactions of the same nature as and competing with that of the company, either on his own account or that of a third person, nor may he be a partner with unlimited liability in another concern carrying on business of the same nature as and competing with that of the company.

Section 1169 Claims against the directors for compensation for injury caused by them to the company may be entered by the company or, in case the company refuses to act, by any of the shareholders. Such claims may also be enforced by the creditors of the company insofar as their claims against the company remain unsatisfied.

Section 1170 When the acts of a director have been approved by a general meeting, such director is no longer liable for the said acts to the shareholders who have approved them or to the company. Shareholders who did not approve of such acts cannot enter their action later than six months after the date of the general meeting on which such acts were approved.

 

3. GENERAL MEETINGS

 

Section 1171 A general meeting of shareholders shall be held within six months after the registration, and shall subsequently be held at least every 12 months. Such a meeting is called an ordinary meeting. All other general meetings are called extraordinary meetings.

Section 1172 The directors may summon an extraordinary meeting whenever they think fit. They must without delay summon such a meeting when the company has lost half the amount of its capital, in order to inform the shareholders of such loss.

Section 1173 Extraordinary meetings must be summoned if a requisition to that effect is made in writing by shareholders holding not less than one-fifth of the shares of the company. The requisition must specify the object for which the meeting is required to be summoned.

Section 1174 Whenever a requisition for the summoning of an extraordinary meeting is made by the shareholders according to the last preceding section, the directors shall forthwith summon such a meeting. If the meeting is not summoned within thirty days after the date of the requisition, the requisitionist, or any other shareholder amounting to the required number, may themselves summon it.

Section 1175 Notice of the summoning of every general meeting shall be published at least once in a local paper not later than seven days before the date fixed for the meeting, and sent by post with acknowledgment of receipt to every shareholder whose name appears in the register of shareholders not later than seven days or, in case the notice is for a special resolution to be made by the general meeting, fourteen days before the date fixed for the meeting. The notice of the summoning of a general meeting shall specify the place, the day, and the hour of the meeting and the nature of the business to be transacted. In case the notice is for a special resolution to be made in the general meeting, the substance of the proposed resolution shall also be included in the notice.

Section 1176 Every shareholder has the right to be present at any general meeting.

Section 1177 Unless there are provisions to the contrary in the regulations of the company, the rules provided by the following sections shall apply to general meetings.

Section 1178 A general meeting may not transact any business unless shareholders representing at least one-fourth of the capital of the company are present.

Section 1179 If within an hour from the time appointed for the general meeting the quorum prescribed by Section 1178 is not present, the meeting, if summoned upon the requisition of shareholders, shall be dissolved. If the general meeting had not been summoned upon the requisition of shareholders, another general meeting shall be summoned within fourteen days and at such a meeting no quorum shall be necessary.

 

5. DIVIDEND AND RESERVE

 

Section 1200 The distribution of dividends must be made in proportion to the amount paid on each share, unless otherwise decided with regards to preference shares.

Section 1201 No dividend may be declared except by a resolution passed at a general meeting. The directors may from time to time pay interim dividends to the shareholders that are justified by the company’s profits. No dividend shall be paid out of losses unless such losses have been made good.

Section 1202 The company must appropriate to a reserve fund, at each dividend distribution, at least one-twentieth of the profits arising from the company’s business, until the reserve fund reaches one-tenth of the company’s capital or such higher proportion stipulated in the company’s regulations. If shares have been issued at a value higher than the face value, the excess must be added to the reserve fund until it reaches the specified amount.

Section 1203 If dividends have been paid contrary to the provisions of the previous two sections, creditors of the company are entitled to have the amount distributed returned to the company, provided that shareholders who received dividends in good faith cannot be obliged to return them.

Section 1204 Notice of any declared dividend shall be published at least twice in a local paper or given by letter to each shareholder whose name appears on the register of shareholders. If the company has any shares represented by certificates issued to bearer, the notice shall also be published once in a local paper.

Section 1205 No dividend can bear interest against the company.

 

6. BOOK AND ACCOUNTS

 

Section 1206. The directors must cause true accounts to be kept:

(1) Of the sums received and expended by the company and of the matters in respect of which each receipt or expenditure takes place.

(2) Of the assets and liabilities of the company.

Section 1207. The directors may cause minutes of all proceedings and resolutions of meetings of shareholders and directors to be duly entered in the books which shall be kept at the registered office of the company. Any such minutes signed by the chairman of the meeting at which such resolution was passed or proceedings had, or by the chairman of the next succeeding meeting, are presumed correct evidence of the matters therein contained, and all resolutions and proceedings of which minutes have been made are presumed to have been duly passed.

Any shareholder may at any time during business hours demand inspection of the above documents.

 

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