Signing Contracts or Taking Deposits Before the Company Is Registered: Who Is Liable in Thailand

The core answer

If you sign a contract, take a deposit or pay a supplier before your limited company is registered, you are probably doing it as an individual, not as the company. The company is a juristic person only once it is registered. Until then there is nobody else to carry the obligation.

The rule (Civil and Commercial Code). Section 1113 says the promoters of a company are jointly liable, without limit, for the debts and payments that the statutory meeting has not approved. Even where the meeting has approved them, the promoters stay liable until the company is registered. Section 1108 (2) lets that meeting ratify the contracts the promoters made and the expenses of starting the company.

Our practical view. Treat everything done before registration as your personal exposure. Keep it small, put it in writing, and move it to the company by a signed agreement with the other side as soon as the company exists. A promise that the company will "take it over" is only as good as the counterparty's written consent.

1. What does section 1113 actually say?

Reading the current text, the section has two limbs:

1. For debts and payments not approved by the statutory meeting, the promoters are liable together and without any cap.
2. For debts and payments that were approved, the promoters are still liable until the company is registered.

The section does not say what happens after registration, and we did not find another section that releases promoters automatically. So the safe reading is: approval by the meeting is a necessary step, but it is not a release from the other party. That comes from the other party's own agreement.

The "promoters" are the people who start the company and sign its memorandum. Since 7 February 2023, s.1097 allows two or more people to act as promoters (previously three).

2. How does a company get formed, and where can I save time?

The sequence in the Code is:

Two points on timing, both from the text:

• Same-day registration exists, but it does not skip steps. Section 1111/1 (added by the Amendment Act No. 18, B.E. 2551) says that if every step below is done on the same day the promoters make the memorandum, the directors may apply to register the memorandum and the company together on that day. The steps are: all shares subscribed, the statutory meeting held with all promoters and subscribers attending and approving, the promoters handing over to the directors, and the directors calling for payment and the payment being made. The meeting is still held; it is just held the same day.
• There is a three-month limit. Under s.1112, if registration is not made within three months of the statutory meeting, the company is treated as not formed, and the money received from subscribers must be refunded in full.

For the practical filing steps, name reservation and forms, see our company registration guide rather than this page. The point here is narrower: the one-day route removes the gap, and the gap is exactly where the personal risk sits.

3. What does "ratification" by the statutory meeting do?

Section 1108 (2) lets the statutory meeting "ratify the contracts the promoters have made, and any expenses incurred in starting the company". Three limits you should know:

• It is a resolution of the promoters and subscribers. The counterparty does not sign it. It tells you who has agreed internally to stand behind the contract. It does not, by itself, tell the counterparty that you are released.
• Under s.1113, even an approved item leaves the promoters liable until registration. Ratification does not shorten that.
• Under s.1109, a promoter or subscriber with a special interest in the matter cannot vote on it.

So ratify, but then also do the thing that really changes your position: a written takeover with the other side (section 5).

4. Does it help to sign "for a company to be formed"?

It helps in two ways and not in a third.

• It tells the other side the truth. Wording such as "[Name] Co., Ltd. (in the course of incorporation), by [Name], promoter" avoids any later argument that you misled them about who the party was.
• It lets you write the exit into the contract. For example: "This agreement is made by the signatory as promoter. On the company's registration the company will assume it by written novation, and the signatory will then be released." The other side must agree to that clause for it to work.
• It does not remove your liability by itself. We found no provision in the Code that turns "for a company to be formed" into a release of the signer. Assume you are still bound unless the contract, signed by the counterparty, says otherwise.

No court decision is cited on this point. The wording is a drafting protection, not a statutory shield.

5. How do I move the contract to the company after registration?

Use a novation: a short agreement signed by three parties (the other side, the company and the individual) saying that:

1. The company takes over the contract from a stated date.
2. The other side accepts the company as its counterparty.
3. The individual is released from obligations arising from that date on, and the parties state how earlier performance and money already paid are treated.

If the other side will not agree, you have two options: keep the contract in your own name and manage the exposure, or ask whether it will terminate and re-sign with the company. Do not assume the company is bound merely because it uses the lease or the services. Document it.

The same advice appears in our BOI waiting-period guide, where the issue is the same: a contract that does not depend on a licence or approval that has not yet arrived.

6. What about deposits and advance payments from customers?

This is where founders get hurt first.

• A company that is not yet registered cannot receive money as the company. If a customer pays you, you are the one holding that money.
• If the customer pays your personal account, a refund claim is against you personally, and mixing it with personal funds makes it harder to show what was set aside.
• The refund rule in s.1112 is about share subscription money when registration fails. It is not a rule about customer deposits, so do not use it as a comfort.
• Where possible, take no deposit until the company has a bank account. If you must take one, say in writing that it is held pending the company's registration and will be returned if the contract is not taken over.

A tax point: a company cannot issue its own tax invoice or receipt before it exists. When a company must register for VAT, and how to treat earlier income, are questions to put to the Revenue Department or your accountant.

7. What about office leases, equipment and utilities?

Leases and equipment deals are the most common pre-registration contracts. Practical steps:

• Sign in your own name only if you must, and add the novation clause from section 4.
• Ask for a short term or an early-exit right in case the company is not formed on time.
• Ask your registration adviser what the registrar needs as evidence of the head-office premises; our company registration guide notes that a premises consent letter is more often requested at later steps such as VAT or bank-account opening.
• Keep proof of what you paid personally, because the statutory meeting and your accountant will both need it.

8. What about the bank account?

Banks generally ask for the company's registration documents before opening a company account, and their requirements vary, so ask the branch what it needs before you register. Until then, do not run the business through a personal account for long: a pile of unrelated receipts makes the later accounting harder. Keep a separate ledger of anything received or paid for the company.

9. Hypothetical example

Two founders agree to start a design studio. Before registration, one signs a one-year office lease for a "company to be formed", and the other takes an advance from a client. Both are, in our view, personally exposed from the day of signing. They register the company two months later. At the statutory meeting, the minutes approve the lease and record the client advance. The landlord signs a three-party novation. The client does not, and the founders refund the advance to the client and sign a fresh agreement with the company. Result: the lease sits with the company, the founder is released by the landlord's signature, and the client engagement is moved with the client's express consent.

This is an illustration only, not a real matter.

10. Checklist if you have already signed

• List every contract signed, money received and money paid before registration
• Identify who signed as what (personally, or "for a company to be formed")
• Register the company; keep to the three-month limit in s.1112 after the statutory meeting
• Have the statutory meeting minutes list the ratified contracts and expenses (s.1108 (2))
• Obtain a written novation or assignment from each counterparty, signed by the company
• Move deposits to a company bank account only with a written record of what each payment is for
• Ask your accountant how to book earlier income and costs, and when VAT registration is needed
• Keep copies of all of the above in one file

Further reading

• Company registration for a Thai owner
• BOI application pending: what founders can do
• Company registration costs in the first year
• When a big client requires a company before the contract
• Money partner and labour partner: splitting shares

Anything signed or paid before registration is yours personally until the other side agrees in writing that the company has taken it over.

We advise founders on registration sequence, ratification minutes and novation agreements. Initial consultation is free — call +66 92 254 2045 or send us the details. See also company registration and contracts and documents.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.