Directors’ Duties in Thailand

>> Board Requirements in Thailand

Appointment of directors

Pursuant to the CCC, the minimum number of directors is at least one (1) and there are no statutory maximum number of directors, unless stipulated otherwise in the Articles of Association (“AOA”) of the company.

Generally there are no residency or qualification requirements in Thailand.  However, there are residency requirements for some specific regulated businesses.

These regulated businesses may require either a Thai national or an individual resident in Thailand, and/or the possession of specific qualifications, such as passing an examination or holding a specific license (e.g. tourist business, private school, insurance broker, telecommunications business, banks and financial institutions).

It should also be noted that although there are no residency requirements, practically it would be useful to have a resident director as there are certain regular filings to be made in country that cannot be delegated.

A director must be a natural person and no legal entities may be appointed to the board of directors.  Further, the following persons are disqualified from being a director: persons under twelve (12) years old

  • persons who are incapacitated
  • persons who are currently declared as bankrupt

Board Meetings & Composition Requirements

A Thailand Limited company is governed by a board of directors. The board meetings can be held physically or through electronic media (provided that certain conditions are met). The board meetings must be held at least once annually. The majority of the directors must attend the quorum unless the articles of association stipulates otherwise. The directors cannot pass resolutions in writing in lieu of a physical meeting. Directors can attend meetings by telephone or any other electronic means (which meet the security standards specified by the Ministry of Commerce) only in the case that (i) at least onethird (1/3) of the quorum of the meeting must physically attend the meeting at the same venue; and (ii) all participants in the meeting, whether participating in person or via electronic media, must be physically present in Thailand at the time of the meeting.

Duration of Mandate and Rotation

At any general meeting of shareholders, one-third (1/3) of the directors, or, if their number is not the multiple of three, then the number nearest to one-third (1/3), must retire from office. A retiring director is eligible for re-election.

Signatory Rights / Powers of Directors

Under Thai law, all directors of a Private Limited company are treated on the same basis regarding their duties and obligations, notwithstanding of the use of any title (e.g. managing director, nonexecutive director). Pursuant to Thailand statutory law, the directors of a Limited company have unlimited signature rights and powers for any kind of legal transaction or legal act in connection with the administration of the company. The material scope of the signature rights and powers of the directors can neither be restricted by the stipulations of the AOA, nor by shareholder’s resolution vis-à-vis third parties.

According to Thailand statutory law and unless specified otherwise in the AOA, if only one  director is appointed, the director shall represent alone. If more than one director is appointed,  they shall represent the company jointly. However, please note that when appointing any director, the company can grant him sole representation powers.

The CCC provides that decisions on certain matters shall be made by a resolution of shareholders passed at a shareholders’ meeting (e.g. increase of registered capital, amendment of the provisions of the Memorandum of Association or AOA, change of directors, etc.). Additionally, the shareholders, by shareholders’ resolution, could limit the authorities of a director to a certain extent (e.g. actions requiring the prior approval by the shareholders), but this may only have an internal effect; i.e. the director could still carry out these actions with binding effect on the company, vis-à-vis third parties.  Normally, a director would request instructions from the shareholders before undertaking any extraordinary actions.

Conflicts

With regards to potential conflicts of interest, please note that directors must not:

  • undertake commercial transactions of the same nature as, or competing with, that of the Company, whether for the benefit of themselves or third parties, without prior approval from the general meeting of shareholders
  • be a partner with unlimited liability in another commercial venture carrying out business of the same nature as, or competing with, that of the company, without prior approval from the general meeting of shareholders

Latest version updated 10th April 2018

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