What is the nominee shareholder? What is a majority shareholder?

Wed, 05/16/2018 - 12:45 -- tilalegaladmin

Whenever you want to do company registration in Thailand, you will always end up encountering notions like majority shareholder or nominee shareholder. These are extremely relevant, but you do have to wonder what they mean, what impact they have and so on. As you can imagine, these notions are very important and they do matter quite a lot in the long term.

 

What is the nominee shareholder?

The nominee shareholder notion is very relevant for company registration in Thailand. The idea here is that the shareholder is in name only. He doesn’t really have a lot of financial stakes nor the interest in the proposed company. But he does have shares, which means that he will be named.

That doesn’t necessarily mean that the nominee shareholder doesn’t care about the business, but his interests are rather limited. And so are the investments that he made in the business. As a result, the nominee shareholder tends to have a rather minimal impact on the business as a whole.

According to the Thailand’s Land Act, having a nominee shareholder is illegal. It can lead to fines or imprisonment if you have this type of shareholder. So yes, it’s very important to figure out how to avoid including such a share holder when you do the company registration in Thailand.

 

What is the majority shareholder?

The majority shareholder is important for the company registration in Thailand. He is the one that holds the most shares, and thus he holds a lot of power in this regard. It’s very important for the shareholder to focus on growing the business, and doing that can be very time-consuming for him. That being said, the company registration in Thailand process will need the approval of majority shareholders, so such a shareholder is extremely important and relevant.

It’s important to know the shareholder or founders before you do company registration in Thailand. The reason is simple, you can end up dealing with a nominee shareholder. This poses no interests in the business whatsoever, and in the end that can be quite problematic. You want to avoid any issues similar to that, which means that approaching this with a more careful tone can indeed pay off a lot.

Foreigners for example can choose to form a Thai majority business, but even so, they have to study the potential investors carefully. This way you can avoid any potential problem and the results will be a whole lot better. It’s definitely important to retain a focus on finding the best solution out there. Most of the time it will work quite nicely, but try to pursue the true interests of your business at all times.

As you can see, the nominee shareholders and majority shareholders are very important for your company registration in Thailand. It’s important to know what shareholders you are working with and what results you can expect in the end. It’s a crucial, very relevant thing to consider, as that may have a huge influence on your business!

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