Registration a company is full of details and steps. We believe that every entrepreneur who is having a company registration project, they will need to find and study a lot of information whether the company registration process, documents used for company registration, various conditions, but this time we will take you to get to know another important element that is. We believe that many entrepreneurs still have many doubts, so let’s get to know the company’s registered capital better.
What is the registered capital of the company?
Company registered capital is the amount agreed and it is agreed by the promoters to register a company with the Department of Business Development in order to legally to start a business. The Board of Directors states that the promoter must consist of at least 3 persons in order to register a company.
The importance of registered capital and credibility ?
A company’s registered capital directly affects the creditworthiness of that company. In addition to demonstrating liquidity and working capital, It also affects the acceptance of large pieces of the company. The higher the registered capital, the more it helps to be confidence and peace of mind for employers, especially when compared to companies in the same scope with less registered capital, the employer would definitely consider choosing a company with a thicker registered capital due to the problem of litigation and the company has to pay for damages. Companies with more registered capital tend to have more debt repayment potential.
What is the minimum of company registered capital and how to pay ?
If considered in terms of law which stipulates that in registering a company, the share value must be more than 5 baht per share, and in registering the company, there must be at least 3 co-founders, 5 baht each, according to the law, the minimum is only 15 baht.
At present, the law stipulates that companies must pay for shares at not less than 25 percent of their registered capital. Therefore, if a company sets a registered capital of 1,000,000 baht, it has to pay 250,000 baht in its registered capital. Entrepreneurs do not have to pay to the Department of Business Development in any way, but let each shareholder actually pay for the company’s shares in order for the company to use that capital for its operations.
How much is the registered capital of the company ?
If you think about it from the perspective of customers or partners that if we had to run business with a company with a registered capital of only 15 baht, it wouldn’t seem unbelievable because the capital used to register a company is a factor that can greatly enhance the credibility, stability and image of the company, because it can represent the budget used to run business and indicate the ability to pay debts of that company. Therefore, most businesses place a registered capital starting at 100,000 baht – 5,000,000 baht depending on the type of business which has no fixed rules, because each company has different environmental factors that are not the same, such as the value of the work received, ability to pay for shares, the amount that the company actually has. Etc., Most of the experts recommend at 5,000,000 million baht because whether it is registered with a capital of 100,000 baht or 5,000,000 baht, the fee is the same 6,500 baht. In addition , there are also other conditions about registered capital as follow
- In the case of hiring a foreign employee holding a Work Permit, the registered capital must be 2,000,000 baht per 1 foreigner.
- Registered capital is one of the criteria for businesses operating in the import and export of foreign-related products.
- Businesses that need to run business or bid with government agencies and state enterprises must have a minimum registered capital of at least 5,000,000 baht.
- For entrepreneurs who need to apply for loans from financial institutions in the future, the amount of registered capital is one of the important factors for credit approval of financial institutions because it can demonstrate the potential for liability for liabilities.
Precautions when informing the registered capital of the company.
Precautions when informing the registered capital of companies that entrepreneurs often overlook the most is the informing of the amount of the paid-up shares in the registration informing process In which the entrepreneur must inform the actual payment amount, for example, if the operator reports the registered capital of 1,000,000 baht and has paid the minimum share at 25%, he should inform the Department of Commerce that the payment has been made at 250,000 baht, not saying 1,000,000 baht, because if the Revenue Department checks and found that the company has only 250,000 baht in the account, which is still missing another 750,000 baht, the entrepreneur has to clarify the missing amount. If avoided by reasoning that the sum of money is with the directors of the company, the Revenue Department will be treated as a loan from the Company. This means that the company will have to charge interest on the loan and when it is time to pay corporate taxes at the end of the year, the interest accrued on this loan must be credited to the Company’s income which, definitely cause the company to pay more taxes.
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