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The ultimate guide for a company director in Thailand in 2023
08/11/2022
Thai law requires every company in Thailand to have at least one director. Furthermore, all companies shall be managed by a director(s) in accordance with the company’s regulations and the general meeting of shareholders.
This article will serve as an introduction to the company directors’ roles and duties in Thailand.
What is the role of a director in a Thai company?
Directors undertake the following key roles for their company.
- Handle the day-to-day operations of the company, including business and financial operations.
- Ensure that business operations are carried out according to previously laid-down rules and regulations.
- Take part in any voting at the board meetings
- Deciding on matters required by laws or proposed by the management
- Setting goals, policies, and strategies for the company
- Monitor, oversee, and evaluate
Who can be a company director in Thailand?
The required qualifications for an individual to be a director in Thailand are:
- Must be at least 20 years old (the individual can sign the application and its supporting document by themselves).
- Not be mentally incompetent or bankrupt.
- Can be a resident or non-resident.
Appointment, resignation, and removal of a company director
As companies grow and scale their operations, their leadership structure can change over time. The addition or removal of a director may become necessary as your business evolves. If you need to change or remove a director from your Thai Limited Company, you must follow a set procedure.
For more information about changing directors in Thailand, please take a look at our blog post here.
How do you appoint a director?
Directors can be appointed through a general meeting of shareholders. Only after receiving the majority of shareholder votes can a new director be appointed.
How does a director resign from their position?
As per section 1153 of the Thai Limited Company Law, a director who wishes to resign must submit a resignation letter to the company. The resignation will take effect from the date the resignation letter reaches the company. Directors who resign must also notify the Registrar of their resignation.
When submitting a resignation letter, the letter must include the director’s declaration to end his status as a company director and be signed by the resigning director.
Removal of a director
Directors can be removed by a resolution being passed at a general meeting.
If the director who is being removed refuses to sign the resignation letter, a shareholders’ resolution to remove the director is required.
When do I notify the change of director?
If the company changes directors, the company must submit the registration to the Ministry of Commerce within 14 days of the change.
What are the duties of a director?
Directors are bound to follow both statutory and fiduciary duties.
Statutory duties
The statutory duties of a director in a private limited company in Thailand include:
- Manage the company according to their experience and knowledge
- Make sure that the payment of shares is made by the shareholders
- Organise the upkeep of company books and documents
- Distribute the dividend or interest payments
- Enforce the decisions in the shareholders’ meetings
- Not undertake commercial transactions of the same nature as, and competing with the company, either on his own account or of a third person
- Not be a partner with unlimited liability in other companies of the same nature as or competing with the company
Public company directors are subject to different and more detailed duties, which include:
- Observing the Public Companies Act, the company’s objects and articles of association
- Not engage in any business in competition with the company
- Where a director purchases or sells property or does any business with the company, such transactions do not bind the company, unless approved by the board of directors
Fiduciary duties
The fiduciary duties of a director are as follows:
- Act in good faith and in the best interests of the company
- Act with proper intentions
- Avoid conflict of interest between personal and company matters
What are the powers of a company director?
The powers of a director include:
- The subsisting directors may act notwithstanding any vacancy among them but, if and so long as their number is lowered below the number necessary to form a quorum, the subsisting directors can act for the purpose of increasing the number of directors to that number, or of calling for a general meeting of the company but for no other purpose (section 1159).
- Directors may set the quorum necessary for the transaction of business at their meetings and unless so fixed the quorum shall (when the number of directors exceeds three) be three (section 1160).
- Questions arising at any meeting of directors are decided by a majority of votes, in case of an equality of votes the chairman has a casting vote (section 1161)
- A director may, at any time, call for a meeting of directors (section 1162).
- The directors may elect a chairman of their meetings, and fix the period for which he is to hold office, but if no such chairman is elected, or if at any meeting the chairman is not present at the time appointed, the directors present may choose one of their members to be chairman of such meeting (section 1163)
- The directors may delegate any of their powers to managers or to committees made up of members of their body. Every manager or committee shall, in the exercise of the power so delegated, conform to any order or regulation that may be imposed on them by the directors (section 1164).
What are the liabilities of a director?
Should a director not comply with their duties or responsibilities, they will be subject to the consequences that arise due to their non-compliance.
Examples of such consequences include dismissal, pecuniary penalties, compensation to the company, shareholders, or third party(s) for the loss that arose from their actions.
If a breach of duty by a director results in a criminal offense, the director may be subject to criminal penalties.
Examples of such criminal offenses include fraud, defamation, forgery of documents and counterfeiting of currencies,
Please note that the breach must have resulted from the director’s action or negligence.
What happens if claims are made against the company and the director?
As per section 1169 of the Civil and Commercial Code, claims against the directors for compensation arising from an injury caused by them to the company may be submitted by the company or, by any of the shareholders (if the company refuses to act).
Such claims may also be brought by the creditors of the company if their claims against the company remain unsatisfied.
How can Belaws help?
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Frequently asked questions
Who can be a company director in Thailand?
The required qualifications for an individual to be a director in Thailand are:
- Must be at least 20 years old (the individual can sign the application and its supporting document by themselves).
- Not be mentally incompetent or bankrupt.
- Can be a resident or non-resident.
Benefits of being a company director
The powers of a director include:
- The subsisting directors may act notwithstanding any vacancy among them but, if and so long as their number is lowered below the number necessary to form a quorum, the subsisting directors can act for the purpose of increasing the number of directors to that number, or of calling for a general meeting of the company but for no other purpose (section 1159).
- Directors may set the quorum necessary for the transaction of business at their meetings and unless so fixed the quorum shall (when the number of directors exceeds three) be three (section 1160).
- Questions arising at any meeting of directors are decided by a majority of votes, in case of an equality of votes the chairman has a casting vote (section 1161)
- A director may, at any time, call for a meeting of directors (section 1162).
- The directors may elect a chairman of their meetings, and fix the period for which he is to hold office, but if no such chairman is elected, or if at any meeting the chairman is not present at the time appointed, the directors present may choose one of their members to be chairman of such meeting (section 1163)
- The directors may delegate any of their powers to managers or to committees made up of members of their body. Every manager or committee shall, in the exercise of the power so delegated, conform to any order or regulation that may be imposed on them by the directors (section 1164).
What does a director do in a company
Directors are bound to follow both statutory and fiduciary duties.
Statutory duties
The statutory duties of a director in a private limited company in Thailand include:
- Manage the company according to their experience and knowledge
- Make sure that the payment of shares is made by the shareholders
- Organise the upkeep of company books and documents
- Distribute the dividend or interest payments
- Enforce the decisions in the shareholders’ meetings
- Not undertake commercial transactions of the same nature as, and competing with the company, either on his own account or of a third person
- Not be a partner with unlimited liability in other companies of the same nature as or competing with the company
Public company directors are subject to different and more detailed duties, which include:
- Observing the Public Companies Act, the company’s objects and articles of association
- Not engage in any business in competition with the company
- Where a director purchases or sells property or does any business with the company, such transactions do not bind the company, unless approved by the board of directors
Fiduciary duties
The fiduciary duties of a director are as follows:
- Act in good faith and in the best interests of the company
- Act with proper intentions
- Avoid conflict of interest between personal and company matters
can a director resign from a company
As per section 1153 of the Thai Limited Company Law, a director who wishes to resign must submit a resignation letter to the company. The resignation will take effect from the date the resignation letter reaches the company. Directors who resign must also notify the Registrar of their resignation.
When submitting a resignation letter, the letter must include the director’s declaration to end his status as a company director and be signed by the resigning director.
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