Q1: I am in the middle of the process of decreasing the company’s capital. I have sent the letters to the creditors as some of our creditors have raised objections for such capital reduction. What does my company need to do to complete the capital reduction process?

Panwa: Please note that if the objection is raised by the creditors, the company cannot proceed with the reduction of its capital unless the company completes the repayment of debt to the creditors and after that, you can proceed to decrease capital.

Remark: Please take note that if the company insists to decrease the capital without clearing the objection from the creditors, the registrar will not accept your application.

Q2: My company plans to decrease the capital at the end of this month due to restructuring. So, I would like to know if is it possible if our company will decrease the capital from Baht 4 million to Baht 2 million?

Panwa: Yes, it is possible. Moreover, please note that for decrease the company’s capital it’s divided into 2 cases as:

Case 1: Decrease the value of each share to a lower amount.

Case 2: Decrease the number of shares.

Kindly also note that for both cases, under the law, the company can decrease the value per share not lower than 5 Baht and for the number of outstanding shares, the capital of the company may not be reduced to less than one-fourth (25%) of its total amounts (according to Civil and Commercial Code, Section 1225), so each capital reduction cannot be decreased to more than 75% of the registered capital.

Q3: The company was incorporated 4 months ago, which our company settled a higher capital and currently we plan to decrease its capital to an appropriate amount. Can you explain how to do for decreasing of capital?

Panwa: For the procedures of decrease company’s capital, it is as following:

Step 1: Appoint all shareholders to meeting for obtain the special resolution to decrease the company capital which the majority voting must not be less than three-fourth of all shareholders.
Remark: According to the law, the capital of the company should not be reduced to less than one-fourth (25%) of its total amounts

Step 2: If there is no objection from the shareholders and they agree, the company can register for a special resolution to decrease capital at DBD within 14 days after the meeting date.

Step 3: Publishing in local newspaper and send the letters to all creditors, if there is no any objection from the creditors within the period of 30 days, the company can proceed to register for decrease of capital and change on the section 5 of the amendment of Memorandum of Association at DBD.