Amendments to Bankruptcy Act Provide Greater Protection for SMES
Recent amendments to Thailand’s Bankruptcy Act which came into force on May 25, will provide SMES with greater protection against bankruptcy. Prior to the amendments, the Bankruptcy Act B. E. 2483 ( 1940), which governs the rehabilitation process for debtors, only protected debtors which were private limited companies, public limited companies, or other juristic persons as defined by Ministerial Regula- tion. It excluded natural persons, juristic bodies, and partnerships. In addition, to be eligible for rehabilitation, debtors had to meet a minimum threshold of insolvency, with an amount of debt not less than Baht 10 million. These requirements hampered SMES’ access to rehabilitation, which is necessary for business survival during hard times.
The amendments open the rehabilitation process to natural persons, juristic bodies, and partnerships, while also lowering the minimum threshold of debt to not less than Baht 2 million for natural persons, not less than Baht 3 million for juristic bodies and partnerships, and between Baht 3 and 10 million for private limited companies.
For more information contact Tilleke & Gibbins at luxsiri. s@ tilleke. com.