Increase Capital: possibility of no real payment?
Same as other jurisdictions in the world, Thai juristic company can increase its capital as often as they want or necessary. This would not be a problematic both in practice and in theory if everything complies with the law; shareholders' meetings, resolution, capital payment.
Nonetheless, the problem will occur if the fund cannot be injected to the company within its accounting period (fully paid up is declared only in the document). This circumstance left the company not so many choices to conduct. The followings are the approach the company may choose;
1. As your accounting already booked the transaction of full payment, let's move it out to be item of advance made to the director.
2. Set up interim loan (or long term, depend on your plan) so the company has time to look for the fund.
3. Reverse all accounting item so the capital being paid is booked as account receivable (this is the least advisable approach since it will contradict to the document presented to the registrar that the payment is made in full. However, it depends on the current circumstance as well what approach suit the company the most. Make sure that the company weight the penalty and benefit being occurred)
Regardless of what approaches the company may take, it must be ensure that all supporting documents are well made and prepared. Because, in case something goes wrong, it is not only the Ministry of Commerce that will come after you, also tax authority..!!!
Same as other jurisdictions in the world, Thai juristic company can increase its capital as often as they want or necessary. This would not be a problematic both in practice and in theory if everything complies with the law; shareholders' meetings, resolution, capital payment.
Nonetheless, the problem will occur if the fund cannot be injected to the company within its accounting period (fully paid up is declared only in the document). This circumstance left the company not so many choices to conduct. The followings are the approach the company may choose;
1. As your accounting already booked the transaction of full payment, let's move it out to be item of advance made to the director.
2. Set up interim loan (or long term, depend on your plan) so the company has time to look for the fund.
3. Reverse all accounting item so the capital being paid is booked as account receivable (this is the least advisable approach since it will contradict to the document presented to the registrar that the payment is made in full. However, it depends on the current circumstance as well what approach suit the company the most. Make sure that the company weight the penalty and benefit being occurred)
Regardless of what approaches the company may take, it must be ensure that all supporting documents are well made and prepared. Because, in case something goes wrong, it is not only the Ministry of Commerce that will come after you, also tax authority..!!!
