Partnerships in Thailand: Your Legal Guide

Forming a partnership in Thailand can be an efficient and flexible way to conduct business. Whether you’re working with local partners or considering cross-border collaboration, choosing the right type of partnership and structuring it properly are essential to managing risk and aligning business goals. At BASE Law Firm, we help clients understand the nuances of Thai partnership law, from liability to registration, management, and dissolution.

Our service include:

Partnership type selection guidance
Registration and legal compliance
Liability and governance structuring
Foreign investor FBA advisory
Partnership agreement drafting
Dissolution and winding-up support

Types of Partnerships Under Thai Law

Under the Thai Civil and Commercial Code, there are primarily two forms of partnership: ordinary partnerships and limited partnerships, each with distinct legal attributes and liability structures.

Ordinary Partnerships
- Also known simply as general partnerships.
- Two or more partners pool their capital to carry out business activities with an agreement to share profits.
- Partners are jointly and unlimitedly liable for the obligations of the partnership.
- These can be either:
  - Unregistered ordinary partnerships, which do not have separate legal personality.
  - Registered ordinary partnerships, which become juristic persons once registered with the Ministry of Commerce.
Limited Partnerships
- Combine general partners (full liability) and limited partners (liability capped at their contribution).
- The managing, operational role must be carried out by a general (unlimited liability) partner.
- Limited partnerships must be registered to gain legal personality.
- If a limited partner takes on a management role, they risk incurring unlimited liability.

Registration & Legal Requirements

Registration for both limited partnerships and registered ordinary partnerships is handled through the District Registration Office based on where the business is located.
For limited partnerships, required details include the firm name, business objectives, partner identities, contributions, and the identity of managing partners.
If there are changes in managing partners, required registrations must be made within a specified timeframe under Thai law.
Partnerships that are not registered but should be (or fail to maintain correct registration) may face administrative fines

Liability, Governance & Management

In an ordinary partnership, every partner has equal standing unless otherwise agreed; all partners are liable without limit.
In a limited partnership, only the general partners hold the right and duty to manage day-to-day operations.
Limited partners who meddle in management can be legally treated as general partners, exposing them to full, unlimited liability.
Operational decisions and authority should be clearly defined in a partners’ agreement to avoid internal conflict or liability surprises.

Foreign Investors & Restrictions

Foreigners’ participation in Thai partnerships may be constrained by the Foreign Business Act (FBA).
In some partnership types (especially limited partnerships), managing partners may need to be Thai nationals to remain compliant and avoid triggering FBA restrictions.
Because of these limitations, partnerships may not always be the most effective vehicle for foreign investment depending on business structure and goals.

Dissolution & Winding-Up

Ordinary partnerships: When partners decide to dissolve, they must settle liabilities, collect and distribute assets, and account for any profits or losses.
Limited partnerships: Liquidation is more formal and governed by the Civil and Commercial Code, requiring legal support (especially in relation to creditors and limited partner contributions).
Registered partnerships must appropriately record the dissolution and deal with third-party claims in accordance with legal and contractual obligations.

Why BASE Law Firm Is the Right Partner for You

Expertise in Thai Law: We have deep experience guiding both Thai nationals and international clients through partnership structures that comply with local regulations.
Tailored Structuring: We help you choose or design the optimal partnership type for your risk profile, capital commitment, and business goals.
Foreign Investor Advisory: Our team advises on FBA implications, liability exposure, and partner roles for foreign participants.
Contract Negotiation: We draft and negotiate detailed partnership agreements, covering contribution, management, profit-sharing, decision-making, and exit rights.
Dissolution Support: If your partnership needs to be wound down, we guide you through the legal process to minimize risk and ensure a smooth transition or liquidation.