The economic crisis caused by the Covid-19 situation and inflation has affected businesses in many industries, with many struggling to bear losses for years until they eventually decided to close their businesses but closing the business, the company, and the partnership, include several procedures for registration of closing and liquidation that must be performed correctly which every entrepreneur should pay attention in order to prevent various problems that may occur in the future.
What are the procedures of closing down business, company, and partnership ?
Closing down business, company, and partnership may not be as easy as when opening because there are several steps to take by liquidating the business, they have to go through legal procedures at the Department of Business Development, the Revenue Department, and the Social Security Office. Before notifying such agencies, the entrepreneur must take the actions as follows :
1. Closing down and applying for registration of closing
A juristic person who intends to close the business in case of the intention of the shareholders, must take action as required by law and convening a general meeting of shareholders to resolve the dissolution of the business, and then can apply for registration of closing with the Department of Business Development. The procedures for closing and registration are as follows:
- When shareholders and directors agree to close the company, they must issue a notice calling an extraordinary general meeting of shareholders to have a special resolution on closing down the company. The issuance of such letter must be made at least 14 days before the meeting date to call for a shareholders’ meeting. The advertisement must be printed in a local newspaper at least once and sent by acknowledgment mail or delivered to the shareholders.
- Hold a shareholders’ meeting and the shareholders must have a special resolution to dismiss with a vote of not less than three-fourths of the number of shareholders attending the meeting and having the right to vote. The appointment of an auditor must also be considered as well.
- After the meeting has been held, an announcement must be made in a newspaper at least once and a written notice to creditors (if any) must be sent within 14 days from the date of resolution of the closing down the company.
- Appoint a liquidator to proceed with the registration of closing down and liquidation of the company, such as collecting assets, repaying debts, repaying advances and expenses paid by directors in conducting business on behalf of the company and apply registration within 14 days from the date of resolution of the closing down the company.
2. Liquidation and applying registration of complete liquidation
Closing down the business or in the process of liquidation, the company also has the duties as follows :
- Preparation of financial statements on the date of closing down the company or the date on which the registrar accepted the registration of closing down by asking the auditor to check and express an opinion that it is correct.
- Call for a shareholders’ meeting to confirm the liquidator’s identity and approve the financial statements on the date of closing down, which must be advertised in a local newspaper at least 7 days before the meeting and sent via acknowledgment mail or delivered to the shareholders.
- Hold a shareholders’ meeting on the day of the meeting, there must be a resolution approving the financial statements on the date of closing down and liquidation.
- The liquidator settles the property, collect receivables, settle debts, and pay company settlement costs. If there is any remaining money, the capital shall be returned to the shareholders in proportion to their shareholding or as specified in the articles of association.
- Issuing a meeting invitation letter to consider and approve the liquidation report.
- Hold a shareholders’ meeting to approve the liquidation report.
- The liquidator manages to complete the registration apply for liquidation and submit the registration to the registrar within 14 days from the resolution of complete the liquidation.
Which organization to contact for closing down business, company and partnership ?
The agencies that must be contacted upon closing down business, company, and partnership are as follows:
1. Department of Business Development
- Registration which will receive a certificate of business closing down to be used as evidence for closing down for the other 2 agencies, the Revenue Department and the Social Security Office.
- Registration complete of liquidation, If the account cannot be settled within 3 months from the date of closing down, the liquidator have to submit a settlement report ( Form L.Ch. 3) every 3 months.
2. The Revenue Department
After registering the closing with the Department of Business Development is completed. If the company is registered for VAT, they must go to the Department of Business Development to notify the closing down the business at the local revenue office where the establishment is located within 15 days from the date of closing registration to the Department of Business Development in order to return the VAT registration and other evidence and filing various tax forms as well as submitting financial statements on the date of registration of business closing as follows :
- Submit the corporate income tax form by filing a P.N.D.50 form with financial statements on the date of business closing registration within 150 days from the date of closing registration.
- Complete withholding tax forms by filing P.N.D. 3 and 53 within the 7th day of the month following the date of registration of closing, such as withholding, accounting fees, audit fees, etc.
- Submit the specific business tax form (P.T.40) within the 15th day of the month following the termination date in case of there is an accrued interest account or interest in the financial statements.
- Continue to submit P.P.30 until receiving “Tax Payer Identification Number Book” from the Revenue Department.
3. Social Security Office
In the case of the employer close down the business, employers must notify employees that they will be terminated at least 1 installment in advance, along with paying wages and severance pay according to the length of service at the rates specified by law, and to notify the end of the business by submitting a change of employer facts form (SPS.6-15) within the 15th day of the month following the month in which the change is made at the Social Security Office where the establishment is located.
PMP Serve (Thailand),
Closing down registration service, for business, company, and partnership.
The closing down of the business, the company, and the partnership are quite difficult procedures. For entrepreneurs or juristic persons who need convenience, PMP Serve (Thailand) is ready to help you register business closing down, liquidation financial statement and account audit by a team of experts experienced in closing down the company. We are happy to give advice and provide services for registration and other related services comprehensively.