Thailand Business Partnership
A partnership is formed when two or more proponents establish and take part on a common goal and one of which is sharing of profit derived from it.
In Thailand, there are two types of partnerships: an ordinary partnership which can be unregistered or registered and the limited partnership.
In a limited partnership, the liabilities of one or more partners are limited while one or more partners’ liabilities are unlimited.
A corporate entity which is also a limited partnership needs to be registered. Likewise, it is also taxed accordingly.
As stated earlier there are two types of ordinary partnerships that share certain characteristics but at the same time, differ on others:
- Unregistered Ordinary Partnership
- Ordinary partnerships may be registered or not and if it is unregistered then it cannot be identified as a legal entity.
- If a partner leaves a partnership entity, his liabilities would still stand.
- Every partners have unlimited liabilities.
- Is taxed as an individual not as a corporate entity.
- Registered Ordinary Partnership
- The liabilities of a partner who has left the venture would cease to exist after two (2) years starting on the date of separation.
- In case of claims, a claim may be held against a partner who made such credit to the creditor and such claim cannot be imposed against the partnership itself.
- It is an ordinary partnership that is duly registered thus can be considered as a juristic person.
Distinction about the Thai Partnership
Since a partnership is also covered by the Foreign Business Act, foreign participation through ownership of shares is also limited at 49% only and the remaining 51% is to be held by their Thai partners unless the Thai Board of Investment is in place and approves majority ownership of shares by foreign partners.