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Private partnership in Thailand

Although Thai limited liability companies (LLC) are Thailand's most common form of business organization and are the preferred choice of foreign investors to conduct business legally, Thai law also recognizes partnerships in the form of ordinary and limited liability partnerships.

Company registration

Thai Partnership

A partnership involving two or more individuals is frequently registered among Thai nationals. This type of Partnership is classified into three categories: Unregistered Ordinary Partnership, Registered Ordinary Partnership, and Limited Liability Partnership (Limited Partnerships).

Ordinary Partnership

  • Ordinary Partnership is a business formed by at least two persons;
  • These persons are joint partners who have unlimited liability for all obligations of the Partnership;
  • It is not necessary to register an Ordinary Partnership, but the partners may do so as provided in Thai CCC Section 1064, under 'A Common Partnership may be registered;
  • The debts and taxes of the Partnership render each partner jointly and severally liable. In other words, if the Partnership's assets are inadequate to fulfil a creditor's claims, the personal assets of the partners will be combined and liquidated to settle the business debts;
  • In the event of wrongful or detrimental actions by one partner (e.g., the misappropriation of another's funds or assets), each partner may be held jointly and severally responsible;
  • Without unanimous consent from all the partners, no individual can become a member of the Partnership unless stated otherwise in the partnership agreement.

If an Ordinary Partnership is not registered, it will not have any legal standing and will be viewed as an individual for tax purposes. Each partner will be accountable for their obligations and income tax payments. Conversely, when Ordinary Partnerships are registered with the Department of Business Development, they are recognized as legal entities and are subject to corporate entity taxation in Thailand.

Limited Liability Partnership

A Limited Liability Partnership is much like an Ordinary Partnership, although it involves two types of partners. One partner, whose liability is limited, and another partner, whose liability is not limited.

Limited Liability Partnerships also register with the Department of Business Development and must consist of at least one managing partner and one or more general partners. The liability of the general partners is limited to the amount of capital invested by each partner. Similar to the status of a director in a limited liability company, the managing partner will have unlimited liability for the obligations and debts of the Partnership. The disadvantage of an ordinary partner would be limited in the same way as a shareholder's liability in an LLC.

If a foreigner is a managing partner, they must have a valid non-immigrant visa for business or employment purposes and a work permit. The Partnership will need to obtain a foreign business license if the foreign partner represents a majority or more than 49% of the investment. To the restrictions set by the Thai Foreign Business Act, the business activities carried out should not be prohibited or strictly limited to foreigners.

The amount of authorized capital is 2 million baht per foreigner to obtain a work permit.

Unlike ordinary Thai partnerships, limited liability partnerships must be registered.

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Update: 19-02-2023
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