“Ignorance of law is no excuse”

If we are optimistic, we may take the opportunity to spend our free time during the low season in Pattaya to reflect every factor around us in the year passed by in order to ascertain the sustainable goal for our future. As we always say that Pattaya has a unique status. The factors affecting the status quo of all foreigners in Pattaya are different from the ones in other part of the country. The analysis of your future in Pattaya should be based on your heart. If you are happy in this city, there is no need to worry about the other factors. The political conflict in Bangkok or the demarcation dispute with our neighboring country should be far from us. In the spinning world where media becomes one of the most lucrative businesses, you may be spun every morning by some media who exaggerate the situation for the sake of their business. It is why you should create the equilibrium of all factors around you. The hyper inflation from the speculative manipulation of the oil price in the New York commodities market or hedge funds affect every country in the world not only Pattaya.

Our article is aimed to be the report or communiqu” of some legal developments which may create the impact on the property buyers in Pattaya. We use the word “report” or “communiqu” instead of “opinion” with the hope that it will be the insightful information which you may digest and analyze.

Last year the property market in Pattaya was affected by the amendment of the foreign business law which created panic for many foreigners who did not understand this law. The conflation or confusion of this law came from some ignorant experts who did not understand that the property buyers in Pattaya were not the target of the enforcement of the law. If you are a low profile foreigner who set up a Thai company in Pattaya to buy a piece of land with the areas not more than one rai (1,600 square meters) for the residential purpose, you should sleep well at night.

This year most of you may hear about the new amendment of the company laws which was in force on 1st July,2008. We will talk only the issues which may create the impact on you.

This amendment changes the minimum of shareholders in all private limited companies from seven in the past to be three shareholders. If your company has already seven shareholders, you just keep it intact.

About the foreign shareholding structure, there is not any change affecting from this new amendment. The foreign business law is the separate legislation from the company laws in the Civil and Commercial Code. There is not any amendment in the foreign business law. If you hold 49% of shares with the position of the sole authorized director, there is nothing you may worry.

The issue in the new amendment which may create some minor effect is about the strict measure to protect all shareholders. The new amendment requires all transactions dealt with the company registry office of the Ministry of Commerce must be legally supported strict process and documentation. In the past, if you want to register any change in your company record with the registry office, e.g., change of director or shareholders or address, etc., you just signed the rim of documents which you did not understand. Even this registration process required the resolution from the general meeting of shareholders. However, nobody cared about the documentation to prove that the meeting is actually held. These documents should be kept in the corporate files for your further reference. It is illegal to submit the documents to the registrar with the false information. You cannot raise your ignorance even you are totally illiterate in the Thai language.  Many fake lawyers in Pattaya dealing with the corporate registration never care about the effect from this illegal practice.

The new amendment requires that all resolutions from the general meeting of shareholders must be documented to prove that all shareholders have properly been notified by BOTH announcement in a local newspaper AND registered mail.

This process will be more time consuming which may require more attention once you buy the property by taking over the shares and directorship in the company owning the property. The address of all shareholders must be properly recorded in the list of shareholders otherwise the process of sending the registered mail to each shareholder will not be legally valid.

It is strongly advisable to retain only a real lawyer or tanai kwam to handle all corporate matters which require the registration with the registry office of the Ministry of Commerce. You should ask the English translation of all documents to read before you sign.

You will be estopped by the old maxim that “Ignorance of law is no excuse”.