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ResourcesCorporate and Tax AdvisoryThailand Corporate LawYearly Audited Financial Statements and Shareholder ID on Thai Companies

Yearly Audited Financial Statements and Shareholder ID on Thai Companies

Transcript of the above video:

In this video, we're going to be discussing some recent developments with respect to the protocols associated with shareholder sheets on Thai companies. Most notably or most specifically, there's been a recent requirement that the ID numbers, the relevant ID numbers on the identity documents pertaining to the individual listed on a shareholder sheet in Thailand, that the ID number also be on the shareholders sheet. Now this sounds like something that's not really an issue but understand older companies where you can't actually find some of these shareholders, this can be a real issue with respect to foreign nationals.

The ID number we're talking about is probably a relevant passport number with respect to Thai nationals. We're talking about the Thai ID card number. The reason I bring this up is in retrospect, if you're looking back the laws with the corporate law in Thailand has evolved over the years. For example in the past, it was required that there be seven shareholders on a company and in more recent years it's been required that there be three years, I should say three shareholders on a Thai company. There's even talk these days of the possibility of maybe having single shareholder companies although that has yet to come to fruition.

We did do a discussion on that in another video on this channel. Now how does this pertain to shareholder ID in the audited financial statement? The Revenue Department has made clear through various rules and protocols that they will only accept a yearly audited financial statement if within the audited financial statement package, the shareholder sheet has been amended to include the ID numbers of the various shareholders involved with the company. Now in most closely held corporations, this usually isn't an issue but in those older companies that had seven shareholders on them, oftentimes you'd have a few shareholders on there that was odd that were on there just as a formality. Whether this was wise to do or prudently done, that's a topic for another time.

But that being said, the seven shareholders were on the company but you may not be able to physically even track down the individuals who or who were on that company as part of the seven shareholders. In fact, there's probably situations looking back where maybe some of those shareholders are even deceased now and are impossible to find but what's more important is where in the past these ID numbers were not listed directly on the shareholders sheet. And now they're being required. It's counting ramifications with respect to filing of audited financial statements because one can't file the audited financial statement without having that document, without having that information in the shareholder sheet and failure to file one's audited financial statement can result in certain fines and penalties assessed by the Ministry of Labor. There are even criminal penalties associated with failure to file an audited financial statement and for this reason, it's probably a good idea to really seriously consider seeking professional assistance in doing the due diligence to find the ID numbers on possible errant shareholders if you will associated with a company as it can have, as strange as it sounds as and as insignificant as an issue, as it would seem this can have tremendous ramifications as a sort of a ripple effect on how a company is going to operate moving forward. Because not being able to file one's audited financial statement can have tremendous ramifications with respect to things like work permit renewal and application visa renewal and as well as previously mentioned various criminal penalties as well as fines and fees accrued as a result of failure to file and accrued by and assessed by the by the Department of Revenue here in Thailand.