Is Commercial Registration Necessary for a Small Restaurant?!

Is Commercial Registration Necessary for a Small Restaurant?

This is one question asked by entrepreneurs and would-be entrepreneurs of SME restaurants. They wonder whether or not commercial registration is necessary when opening a restaurant. In principle, it is correct to register commercially when opening a restaurant or any business in accordance with the law. The registration is to report that we have started operating business correctly and openly with a clear business location registered in the system of the Ministry of Commerce. There are two types of commercial registrations, namely, ordinary person and juristic person registrations.

▶️ Ordinary Person Commercial Registration

For ordinary person commercial registration, or what most people call “legal commercial registration”, the Commercial Registration Act, B.E. 2499 (A.D. 1956) states that ordinary people who operate restaurants are required to register commercially within 30 days after launching their restaurant businesses.

📍 If the restaurant is located in Bangkok, registration can be applied at the district office in which the restaurant is located.
📍 For other provinces, registration can be applied at the municipality or sub-district administrative organization in which the restaurant is located.
Each commercial registration costs 50 baht. After commercial registration is complete, the commercial registration certificate has to be displayed  in an office in a conspicuous and easily-seen location, and a sign containing the commercially-registered name of the restaurant has to be put up in front of the restaurant and branches (if any). For ordinary commercial registrations, the Por. Ngor. Dor. 94 form has to be filed in the first half of the year and the Por. Ngor. Dor. 90 in the second half of the year. Value-added tax registration is optional for entrepreneurs who earn less than 1,800,000 baht per year. However, every entrepreneur who earns more than that amount must register for value-added tax by filing the value-added tax registration form (Por. Por. 01 Form).

🚩 Documents to Accompany Commercial Registration (Ordinary Person):
Download from this link here: http://www.dbd.go.th/download/downloads/01_tp/form_tp.pdf

▶️ Juristic Person Commercial Registration

Also known as company registration, this process is more complicated than ordinary person commercial registration because actions have to be taken in line with civil and commercial codes for company partnerships. For this, there has to be a company founder, a memorandum of association has to be drafted, a registered capital has to be set, and a joint venture has to be obtained to purchase shares in the company. Share values have to also be set. For example, if one million baht is registered, it could be divided into 10,000 shares at 100 baht per share. However, it does not matter how many shares each shareholder holds.

📍 Stores located in Bangkok can apply for registration at the Office of the Central Company and Partnership under the Department of Business Development, Ministry of Commerce, or the local district commercial registration office.
📍 For other provinces, people can apply for registration at provincial commercial registration offices. Company registration fees will depend on the amount of registered capital.
The rate is 50 baht for every one hundred thousand with a minimum of 5,000 baht and maximum of 25,000 baht.

🚩  Documents to Accompany Commercial Registration (Juristic Person):
Download from this link here:  http://www.dbd.go.th/news_view.php?nid=369

But that’s not all!
For juristic person commercial registration:
✔️ At least one certified public accountant has to be appointed to audit the company’s accounts.
✔️ The company’s directors have to prepare accounts, balance statements and profit and loss statements every six months for each accounting period. All of these accounts and statements have to be certified by the auditor and submitted to the Office of the Company and Partnership Registration.

In addition, business profits have to be calculated for juristic person income taxes.
💰 No taxes have to be paid if the business suffers a loss or generates no more than three hundred thousand baht of profits in an accounting period spanning one year.
💰 If more than three hundred thousand baht but no more than three million baht of profits are generated, a 15-percent tax has to be paid.
💰 For a profit greater than 3 million baht, a 20-percent tax of profits has to be paid.

Summary of Advantages and Disadvantages for Ordinary Person and Juristic Person Commercial Registrations