Question 1

What is the difference between a Managing Partner and a Limited Liability Partner?

Accepted Answer

The law divides partners in a Limited Partnership into 2 main types, which affects their responsibility over personal assets, as follows: 1. Managing Partner The law requires a Limited Partnership to have at least 1 partner of this type to manage the business. They have full authority to sign and bind the Limited Partnership. However, the caveat is that they must be responsible for the debts of the Limited Partnership on an "unlimited" basis (if the business faces problems and has to close, the personal assets of the Managing Partner may be used to pay off debts). 2. Limited Liability Partner Acts only as a "co-investor" with no right to sign orders or manage the business. The advantage is that they will be responsible for the debts of the Limited Partnership "limited to no more than the amount they promised to invest" (100% safe for personal assets).

Question 2

What is the difference between a Company Limited (Co., Ltd.) and a Limited Partnership (Ltd. Part.), and which one should I choose?

Accepted Answer

Although both structures have the status of a "Juristic Person" and have the same tax rates, there are major differences regarding "Liability for debts", "Credibility", and "Restrictions on foreigners". To make it easier to understand and decide, let us compare them as follows: 1. Company Limited • Liability: "Limited liability" (except for directors). All shareholders are liable for the company's debts up to the unpaid amount of their shares (this clearly separates personal wallets from business wallets, keeping personal assets safe). • Credibility: Very high. Suitable for long-term business, government bidding, taking on large projects, attracting investors, or B2B (Business-to-Business) operations. • In case of foreigners / Work Permit requests: Highly suitable. The law and government agencies excellently support the Company Limited structure, whether it involves foreigners holding shares (up to 49%), Work Permit requests, business visas, or BOI investment promotions, etc. • Number of founders: Currently, a minimum of only 2 shareholders is required to register. 2. Limited Partnership • Liability: The law requires at least 1 partner to act as the "Managing Partner", who must be responsible for the business's debts on an "unlimited" basis (if the business has problems, the managing partner may have to use personal assets to pay debts). Other partners' liability is limited to the money they invested. • Credibility: Moderate. Suitable for small businesses, Family Businesses, or enterprises where partners are not too serious about the juristic person format. • In case of foreigners: Not recommended. Having foreigners in a Limited Partnership entails highly complex legal restrictions. If a foreigner is made the Managing Partner, it might be interpreted as an alien juristic person, making business operations and Work Permit requests much more difficult than a Company Limited. • Number of founders: Requires only 2 founders, the same as registering a company. Summary: Which one should you choose? • Choose a "Company Limited" if you are looking for the highest credibility, have plans to expand the business or branches in the future, want to limit risks from affecting personal assets, have foreigners as shareholders, or plan to hire foreign employees (Work Permit requests). • Choose a "Limited Partnership" if it is a family business or close people you trust 100%, the business does not have high debt risks, there are no foreign partners, and you emphasize the simplest management structure. Note: Currently, the costs for registration, monthly accounting, and annual financial closing for Co., Ltd. and Ltd. Part. are not much different. Registering as a "Company Limited" generally yields maximum benefits in the long run.

Question 3

Does registering a Limited Partnership really save costs on annual accounting audits (CPA / TA)?

Accepted Answer

True. This is one of the most important advantages of registering a Limited Partnership. By law, if your Limited Partnership meets the criteria of a small enterprise (Small SME) which means having registered capital not exceeding 5 million THB, total revenue not exceeding 30 million THB, and total assets not exceeding 30 million THB, you are entitled to use a Tax Auditor (TA) to audit and sign the annual financial statements. Normally, the service fees of a TA are more economical and accessible compared to using a Certified Public Accountant (CPA), which the law mandates for "Company Limited" of all business sizes. This results in the Limited Partnership having lower annual management costs.

Question 4

What is the Registered Capital (Capital Contribution) of a Limited Partnership? Can I register if I don't have the entire lump sum?

Accepted Answer

In a Limited Partnership, we refer to the registered capital as "Capital Contribution", which can be invested in cash, assets, or labor. "Paying the capital contribution" does not mean paying money to anyone, but it means depositing capital into a bank account under the name of the Limited Partnership to be used as working capital for the business (which can be opened after the Limited Partnership registration is complete). • If you do not have the entire lump sum: You can gradually deposit money into the account once the Limited Partnership's account is opened (the law does not force you to pay 100% fully immediately). You may start by opening the Limited Partnership's account with 1,000 THB. If there are business-related expenses, you can deposit money into the account and then pay it out. This lump sum does not need to sit idle in the account. • Precautions: Except in the case where the Limited Partnership has a total investment of more than 5 million THB, the law requires the actual money to be present, and a Bank Certificate of all partners from the bank must be shown during the registration process.

Question 5

Can foreigners become partners in a Limited Partnership?

Accepted Answer

Legally it can be done, but practically and managerially, we highly do not recommend it. Having a foreigner as a partner in a Limited Partnership involves quite complex legal restrictions. Especially if a foreigner becomes a "Managing Partner", the Limited Partnership might be interpreted as an "Alien Juristic Person", which could lead to: 1. Being restricted from operating many types of businesses in Thailand (according to the Foreign Business Act). 2. Requesting a Work Permit and business visa for foreigners may be complicated and has a much higher chance of being rejected than a Company Limited. (If there is foreign co-investment, we recommend choosing to register as a "Company Limited", which will be smoother and provide maximum benefits in the long run.)

Question 6

If I don't have an office yet, or use a rented house/condo as a location, can I register?

Accepted Answer

Yes, you can register under the following conditions: • Rental house/rented space: A "Letter of Consent to Use the Premises" is required, along with properly certified copies of the ID card and house registration of the "House Master or Property Owner". • Condominiums: Registration is possible, but quite complicated as you must first obtain consent from the condominium juristic person or building manager. Many projects have internal regulations that do not allow residential units to be used as offices. Additionally, there are ongoing complications with VAT registration or obtaining various licenses later on. Additional information: A single house registration can be used to register multiple limited partnerships without any issues at the Department of Business Development. However, if you later need to register for VAT, the Revenue Department may assess whether the premises can reasonably accommodate multiple juristic persons. If there is a reasonable explanation, this will not be a problem. (If you prefer not to use your own premises, we have a Virtual Office service available to solve this problem.)

Question 7

Once the Limited Partnership is registered, do I have to register for Value Added Tax (VAT 7%) immediately?

Accepted Answer

Not necessarily. Registering a Limited Partnership and registering for Value Added Tax (VAT) are two different things. A Limited Partnership is forced to register for VAT only when it has business income exceeding 1.8 million THB per year. However, if the Limited Partnership needs to import-export goods, or deal with B2B partners where partners require tax invoices to be issued, the Limited Partnership must apply for Value Added Tax (VAT) registration to be able to issue tax invoices to partners from the start of the business.

Question 8

After the Limited Partnership is registered, but hasn't started selling or hasn't generated income yet, do I need to do accounting?

Accepted Answer

Must do. By law (Accounting Act B.E. 2543), all types of juristic persons are required to prepare accounts and submit financial statements to the Department of Business Development and the Revenue Department "even if there is no income, no expenses, or the business has not yet started operating in that year (Zero Declaration)". Neglecting to submit on time will result in relatively high legal fines.

Question 9

Does the Managing Partner have to deduct their own salary to submit to Social Security?

Accepted Answer

No need. As you are the Managing Partner and business owner, you are in the position of an "Employer", not an employee. Therefore, you cannot and do not need to register as an insured person (Article 33) in your own Limited Partnership. However, whenever the Limited Partnership starts hiring "full-time employees", the law requires the Limited Partnership to register as an employer and submit Social Security for the employees within 30 days from the date of hiring.

Limited Partnership (Ltd. Part.) Registration. Easy to manage, cost-effective.

Everything you need to start a Limited Partnership

Consulting and Liability Structuring

Document and Application Preparation

Juristic Person Registration Submission

Tax Identification Number Request

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What to prepare for Limited Partnership registration

1. Important documents required

2. Basic business information

4 simple registration steps

Consultation and Name Reservation

Document Preparation via Government System

Online Identity Verification (Convenient, No travel required)

Registration Submission and Delivery

Frequently Asked Questions

Related Services

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Monthly tax

VAT Registration