How a Limited Partnership Thailand Recognizes Splits Liability
A limited partnership Thailand law establishes divides partners into two distinct liability classes — but a limited-liability partner who steps into management risks losing that protection entirely.The third form of partnership under Thai law is the limited partnership, following the company name reservation process covered in this article.
A limited partnership has two distinct classes of partners, each subject to different liability:
- One or more partners are liable only up to the amount they contributed to the partnership; and
- One or more partners are jointly and unlimitedly liable for all obligations of the partnership.
The distinction between these two classes goes beyond liability alone — each is also subject to different restrictions:
- The firm name cannot include the name of any limited-liability partner;
- Limited-liability partners cannot contribute services to the partnership; their contributions are restricted to money and other property;
- Limited-liability partners may transfer their shares without the consent of the other partners; and
- Creditors of the limited partnership have no recourse against limited-liability partners prior to the partnership’s dissolution.
Management of the limited partnership rests with the unlimited-liability partners. If a limited-liability partner interferes in management, that partner will become jointly and unlimitedly liable for all obligations of the partnership — losing the protection their status would otherwise provide.
As a juristic person, a limited partnership is itself subject to corporate income tax. The individual partners are then subject to personal income tax on their respective share of profits received from the partnership.
Anyone structuring a limited partnership Thailand law permits should carefully consider who will actually manage the business day-to-day, since a limited-liability partner’s involvement in management can inadvertently convert their protected status into full, unlimited liability for the partnership’s obligations.