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< The Civil and Local Public Enterprise Code, Section 1097 on the
Establishment of a Company requires that only an individual can found a

company, making local governments with a status of “Legal Entity” not
be eligible to found a company.
< The objectives of the company are to only conduct utility services.
< The proportion of shares owned by local governments in a Local Public

Enterprise is overlapping in the total shares. The case of a municipality
shall be counted only shares held by the local governments (Municipality,

Subdistrict Administrative Organization, Provincial Administrative
Organization, and Sanitary), but the total shares held by the other forms
of local administration will not be determined. In the case of Bangkok,
government agencies are allowed (government agencies and other public

enterprises), in addition to local governments, the rest can hold the
shares of enterprises without limit.
< The lack of regulations or guidelines on the establishment of a company

and shareholders obstructs the establishment of Local Public Enterprises
by local governments.It is found that there are no rules or guidelines on
the establishment or acquisition to support the legal establishment by

local government. Unlike the purchase and sales of shares by
government agencies, the guidelines have clearly defined on the
regulations of Ministry of Finance on the sale and purchase of shares

issued by government agencies 2535 B.E, section 24, paragraph 5 of
the Budget Act, 2502 B.E
< The operations in the form of a limited company require administration by

a board appointed by the shareholders. As a result, it is more likely that
government employees or officials of local governments as well as their
acquaintances will be appointed as the members of the board. Those who

are appointed may not be qualified to the positions.
< The conflict of interests in the establishment is easy to occur. Since the
Civil and Local Public Enterprise Code Section 1097 requires only the

individual to establish a Local Public Enterprise, it could allow
administrators and local government officials who may be an individual to
establish the enterprise to become only stakeholders holding all the

power in legal issues. The Act on the Prevention of Corruption 2542
B.E, Section 100, prohibits government officials to be a partner or
shareholder in a corporate located in the same restriction as the officials.