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Legal Update - 26 October 2016

Duties of a Liquidator of a Private Limited Company under Thai Law

 

1. Liquidator

 

  • A liquidator may be a director or any person, being a natural person; not a juristic person. The liquidator shall be liable for another two years after the completion of the liquidation. However, the said liability is limited to the company’s remaining cash and assets upon liquidation.

 

2. The Authorised Signatories

 

  • DBD: In case the liquidator is not a director, upon registering the dissolution of the company, the Department of Business Development (“DBD”) requires the authorised directors - before dissolution - to sign a copy of the minutes of the shareholders meeting adopting the special resolution to dissolve the company and to appoint the liquidator. Thereafter, the said directors are no longer required. The name of the liquidator will be shown in the Affidavit of the company and then all documents will be signed by the liquidator.

 

  • Work Permit/Visa: Upon dissolution, the liquidator can sign in place of the director to notify the relevant authorities to terminate the work permit and visa.

 

  • Bank: In principle, upon dissolving the company, the liquidator will be required to sign for all payments and withdrawals. However, some banks may not allow any payments or withdrawals unless evidence of required payment is attached to an explanation letter to the bank on a case by case basis. Practically, each bank may have different criteria regarding the person authorised to sign for any payments and withdrawals; therefore, the company is required to conduct a check with its bank on this matter before commencement of the dissolution process.

 

  • Debtors/Creditor

 

The liquidator must notify the company’s debtors and creditors that the company has been dissolved and ask debtors to make payments to the liquidator, as well as ask the creditors to receive payments from the liquidator.

 

  • Pending Litigation

 

The liquidator has to continue proceeding with any pending litigation with the court and any other authorities.

 

3.  Duties of the Liquidator

 

  • To settle the affairs of the company, to pay its debts and to distribute the company’s assets.

 

4.  Authority of the Liquidator

 

  • To bring or defend any legal proceedings, civil or criminal, and to make compromise, in the name of the company.
  • To carry on the business of the company, as far as may be necessary for a beneficial settlement of the affairs.
  • To sell the property of the company.
  • To perform other acts as may be necessary for a beneficial settlement of the liquidation.

 

5. Bankruptcy

 

  • After liquidating all assets of the company, if the liquidator finds that the indebtedness is more than the said assets, he/she must immediately apply for the court to declare the company to be bankrupt unless the creditors agree to release the said indebtedness.

 

6. Pending Litigation

 

  • If there is any pending litigation at the court, the company cannot complete the liquidation so long as the litigation has not been made final or compromised. However, the liquidator can file the bankruptcy petition as in item 5 above.

 

7. Reversibility

 

  • Upon registering the dissolution with the DBD, the company cannot cease to exist and then re-open again for operations.

 

 

This article is not to be treated as a legal opinion but rather only as a guide on the liquidator of a private limited company and his/her duties under Thai Law.

 

                                 This article is prepared by Ms. Nilobon Tangprasit

                 (20 October 2016)

 

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