Small and medium-sized enterprises (SMEs) have grown rapidly in Thailand over the past ten years, creating millions of jobs and contributing to the Kingdom’s steady economic growth. According to the 2015 annual report of the Office of SMEs Promotion (OSMEP), there were approximately 2.7 million SMEs at the end of 2015, employing around 10 million people, particularly in the tourism, construction, and wholesale sectors.
A partnership begins with a splash of optimism—a toast to the future and a plan for capitalizing on business opportunities. But what happens when it all goes wrong? Aggressive creditors may force a partnership into bankruptcy and certain individual partners may be required to follow. This article is a primer on the bankruptcy liability of partners.
A person’s debts do not come to an end just because he or she has died. After the debtor has passed away, the creditor is entitled to seek repayment of the debt from the debtor’s estate. Some debtors have life insurance under which the insurer will pay compensation to the beneficiaries stated in the policy, the debtor’s heirs where no beneficiaries are specified in the policy and, in certain cases, the debtor’s creditors. Under the Civil and Commercial Code of Thailand, creditors are entitled to be repaid from insurance benefits in three specific circumstances, as detailed below.
Death is not always final, at least not for juristic persons under Thai law. Under certain circumstances, companies can be revived after being legally declared defunct or dissolved. This article will discuss how and when such companies can be restored.
Dissolved vs. Defunct
New amendments to Thailand’s Bankruptcy Act aim to: (1) streamline the procedures which require court approval in reviewing claims for repayment of debt; (2) allow creditors additional time to file a claim for debt repayment if the cause of late filing was a force majeure event; and (3) increase the current penalties to match present economic and social conditions.
Thailand is no stranger to tumultuous events, be it unrest in the Deep South, widespread flooding, economic slowdowns in trading partners, domestic protests, exchange rate instability, global economic crises, or flailing tourism.
In order to receive royalties, a trademark owner may license out its trademark rights to another party. To license trademark rights, a trademark license agreement must be made in writing and registered at the Department of Intellectual Property (DIP), in accordance with Section 68 of the Thai Trademark Act. If a trademark license agreement is not registered, it will be void, according to Section 152 of the Civil and Commercial Code and the support of various Supreme Court judgments (Decisions 7770/2547, 6436/2543, and 6190/2550).
Thailand’s economy does not paint an image that befits the country’s reputation as the “Land of Smiles.” Politics, drought, floods, and conflict in the Deep South have taken their toll on Thai businesses. As a result, we have seen a steadily rising number of business reorganizations over the past few years. This article outlines Thailand’s business reorganization procedures and how creditors can collect debts from companies involved in reorganization.
Recent amendments to Thailand’s Bankruptcy Act which came into force on May 25, 2016, will provide SMEs with greater protection against bankruptcy.
In order to repay debts, many flailing companies allocate additional resources to uncover new sources of income. In turn, these companies incur more debt, and this often leads to a vicious downward spiral ending in bankruptcy.
Despite this bleak outlook, these companies still have the potential to recover and become profitable. One way is through reorganization, which provides relief to debtors that allows them to survive the crisis while ensuring that their creditors receive fair repayment.