What is minimum registered capital, and how does it differ by type?

Registered capital It is the amount of capital that the promoters of the company agree to use to start the business. It is expressed as the amount specified in the memorandum of association. and company registration certificate which will be displayed to the public You must register with the Department of Business Development. This amount of capital is like a reserve fund that the company can use for operations, investments, expansion, or debt repayment.

Why is it important to understand registered capital before registration? Here are 10 reasons why.

1. Registered capital reflects the investment capacity of the business and its stakeholders.
Registered capital indicates the readiness and financial capacity of shareholders to allocate funds for serious business operations, rather than merely establishing a legal entity for other purposes. This increases credibility in the eyes of outsiders. 

2. It affects the application for various licenses according to the law.
Applying for a business license, work permit, Non-Immigrant B visa, and certain special licenses all have minimum registered capital requirements, which can be advantageous when applying for various permits to operate the business in the future. 

3. It is related to inspections by government agencies, such as the Revenue Department.
A company with high registered capital but no actual business operations or appropriate revenue may be subject to scrutiny regarding transparency in its operations. 

4. It affects the legal liability of the shareholders.
Shareholders are liable for the company’s debts up to the amount of their shareholding. Therefore, registered capital also defines the extent of each shareholder’s liability. 

5. Setting an inappropriate level of registered capital may have negative impacts on the business.

• Having registered capital that is too low may cause the business to lose credibility in the eyes of customers and partners.
• Having a registered capital that exceeds the ability to repay may create a burden and lead to strict scrutiny in the future, potentially resulting in business risks. 

6. Adjusting the capital, whether increasing or decreasing, involves a complex process and takes time.
If the registered capital is not properly planned from the beginning, it may be necessary to increase or decrease the capital later, which requires a shareholders' meeting, document submission, and additional costs. However, if you need to adjust your capital, whether increasing or decreasing, you can consult FDI for guidance. 

7. It can impact the company's image and credibility from the perspective of external parties.
Adequate registered capital that matches the size of the business helps enhance credibility when interacting with customers, partners, investors, and financial institutions. 

8. It affects accounting, finance, and overall business management.
The payment of capital and the related accounting entries must be clear, transparent, and auditable, which will directly impact the company’s credibility.

9. It helps in planning the financial structure efficiently.
Registered capital is a key component in budget allocation, investment planning, and future business expansion.

10. It carries direct legal obligations, not merely serving as information for company registration documents.
The registered capital stated in the company registration is a legal obligation for shareholders. In the event of a lawsuit or a capital call, shareholders will be liable up to the amount of capital they have declared. 

What is the minimum registered capital required by law?

• Limited Company : Registered capitalMinimum 10 baht with common shares must have value Not less than5 baht per share and must have shareholders Not less than 2 people
• Limited Partnership : Registered capitalNo minimum but must have at least 2 partners
• Juristic Ordinary Partnership : Registered capitalNo minimum. But there must be at least 2 partners
• Public Limited Company: Minimum registered capital of 5 million baht, with common shares having a par value of not less than 10 baht per share, and at least 15 shareholders are required.

By law, the minimum registered capital is specified according to the type of company registration. However, most businesses declare registered capital based on what is appropriate for their operations. For example, large-scale businesses tend to register higher capital to enhance credibility with partners and demonstrate their management capability and potential for future growth. 

Factors that should be considered in determining the amount of registered capital

Setting registered capital is a fundamental step in establishing a business. Carefully considering the capital based on actual business conditions, financial needs, legal requirements, company image, and other relevant factors will help ensure that the business operates steadily, correctly, and more efficiently. You can read more at: What is registered capital?? Things you should know before registering a company

If entrepreneurs are still unsure about the appropriate amount of registered capital, it is advisable to consult accounting, legal, or business advisory experts such as FDI to support proper decision-making. You can contact: @fdigroup  

Registered Capital Allocation Strategies

1. Analyze Initial Expenses: Assess costs related to company registration, office rental, equipment purchases, employee salaries, and other initial expenses.
2. Plan Capital Usage: Allocate portions of the capital for each activity, such as 50% for initial expenses, 30% for business expansion, and 20% for reserves.
3. Consider Long-Term Needs: Forecast business growth and allocate capital for future expansion.
4. Consult Experts: Seek advice from lawyers, accountants, or financial planners regarding registered capital allocation. FDI Accounting & Advisory is a company offering comprehensive company registration services, with over 30 years of experience. Free consultations are available!

Example of allocation of registered capital 

Business Type: Restaurant Registered Capital: 1,500,000 Baht

• Initial Expenses: 700,000 Baht
  • Registration fee 50,000 baht
  • Space rental fee 200,000 baht
  • Equipment Purchase: 300,000 Baht
  • Hire employees for 150,000 bahtHire employees for 150,000 baht

• Business Expansion: 500,000 Baht
  • Additional Equipment Purchase: 200,000 Baht
  • Develop a new menu 100,000 baht
  • New Branch Expansion: 200,000 Baht
• Reserve: 300,000 Baht
  • Miscellaneous Expenses: 150,000 Baht
  • Emergency Fund: 150,000 Baht

Company registration services and business operation license applications in Thailand.

 Why Choose Our Services? 

• We provide expert consulting services with experienced professionals, offering precise guidance to save you time in finding the answers you need.
• We have successfully completed the registration of limited companies and business license applications for over thousands of cases, with many clients returning for services and recommending us to others. 
• We offer comprehensive services for business operations. Once company registration is completed, we provide accounting systems, tax planning services, and other support across all business sectors. 
• We deliver services that are fast, complete, and legally accurate. 
• Our pricing is fair and reasonable for the quality of service provided.

Contact Us 

• Facebook : FDI Group – Business Consulting
• @fdigroup
• Phone : 02-642-6866, 02-642-6869, 02-642-6895
• E-mail : infojob@fdi.co.th
• Website : www.fdi.co.th