Directors’ Duties in Thailand

>> Powers and Duties in Thailand

You must act within the powers imposed by legislation and the company’s AOA. The AOA govern how the company is to be run, including the powers and responsibilities of directors.

Duties – Skill and Care

In exercising directors’ powers, you are required to exhibit a degree of skill and diligence as may reasonably be expected from a person with your knowledge and experience.

You must also exercise a degree of care in your actions as the company’s director. The test of an acceptable level of care is what a reasonable person would do in looking after their own affairs.

Duties – General

As the company’s director, you must act in a way which you think is most likely to promote the success of the company.  You need to consider a number of statutory factors relating to corporate requirements, including the long term consequences of your decisions, the company’s reputation, and the interests of other company’s stakeholders such as employees, customers and the community.

Directors shall perform their duties in the management of the company honestly and in the best interests of the company.  Directors must, in their conduct of the business, apply the diligence of a careful businessman/businesswoman and comply with the resolutions of the board of directors and meetings of shareholders, the AOA and statutory law.  Further, directors shall not put themselves in a position where there is a conflict of interest between their personal interests and duties.

In addition to the above, directors are deemed directly responsible for:

  • the payment of shares by the shareholders
  • directors may call upon the shareholders in respect of all money owed, in respect of their shares if the share capital is not fully paid up. In such a case, at least twenty-one (21) days’ notice must be given, by registered mail, of each call and each shareholder must pay the amount due at the time and place fixed by the directors
  • if a shareholder fails to pay the call by the specified deadline for payment, the directors shall be responsible for serving notice to the shareholder by registered mail to pay the call with interest. Such notice must fix a reasonable time within which such call and interest must be paid by. In the case of non-payment, the share in respect of which such call was made may be forfeited
  • ensuring the existence and regular keeping of the required books and documents as prescribed by law
  • the proper distribution of the dividends as prescribed by law
  • the proper enforcement of the resolutions of board meetings and the general meeting of shareholders

Statutory Duties

The following is a summary of some of the duties, arising from the CCC in which directors should be aware of. Directors are required to arrange for the following:

  • signing, issuing and delivery of share certificates to each shareholder
  • issuing certificates to bearers for shares fully paid up in accordance with the AOA
  • keeping a register of the shareholders at the registered office of the company which is available for the shareholders’ inspection
  • delivering a notice of invitation of any general meeting of shareholders and publishing the notice in a public newspaper in accordance with the AOA
  • arranging the annual accounts to be produced and audited by one (1) or more auditors at least once every twelve (12) months following the end of the financial year of the company
  • delivering a copy of the audited financial statement to all shareholders at least three (3) days before the date of the annual general meeting
  • holding a general meeting of the shareholders at least once in every twelve months and reporting to the general meeting of shareholders in respect of the business activities of the company performed during the financial year of the company
  • ensuring the filing of the audited annual accounts, the list of shareholders of the company and an application for the registration of any changes of its corporate records with the Ministry of Commerce (MOC)
  • delivering a notice of the declaration of dividend payments to all shareholders
  • proceeding the dividend payment and contribution of reserve fund in accordance with the Company’s AOA

Duties – Other

There are many other areas of the law that impose duties on directors and senior managers.

Anti-Bribery Duties

There are a number of laws in Thailand that contain anti-money laundering, anti-bribery and anti-corruption measures, such as the Money Laundering Prevention and Suppression Act, the

Organic Act on Counter Corruption, the Criminal Code, and the Act on Concerning Offences relating to the Submission of Bids to State Agencies.

Health and Safety and Environmental Duties

The Safety, Health and Workplace Act and Labour Protection Act imposes the following responsibilities and duties of the company (and the directors) in respect of the safety and health in the workplace:

  • to arrange and ensure that the workplace and the employees have safe and hygienic work conditions and environment to prevent the employees from suffering injury to life, body, mind, health
  • to administer, manage and operate the occupational safety, health and environment in conformity with the standards specified in the Ministerial Regulations
  • to comply with various obligations under the Ministerial Regulations on Prescribing of Standard for Administration and Management of Occupational Safety, Health and Environment in relation to Fire Protection 2012 and the Ministerial Regulations on Criteria and Method of Conducting Health Checkup of Employees and Forwarding the Results of Health Checkup to Competent Labour Inspector 2004
  • to arrange to have: (i) safety performance officer(s); (ii) safety, occupational health and working environments committee; and/or (iii) department within the company to engage in the safety of the workplace in accordance with the Ministerial Regulations. The number of the above safety performance officers,  committee or department will depend upon the number of the total employees of the company and

the types and categories of the business of the company;

  • to give the information in respect of potential dangers at work and hand out operational manuals to all employees who must work in conditions or an environment where they may

sustain injury to life, body, mind, or health, before they commence working

  • to announce and post warnings or orders received from the government agencies at a visible location within the workplace for a minimum of fifteen days from the date of receiving such warnings or orders
  • to arrange an occupational safety, health and environment training for all executives, supervisors and employees
  • to provide a training to new employees, the employees who change a position or workplace, or change a machinery or equipment, which may cause injury to the life, body, mind, or health of such employees, before they commence working
  • to post warning signs or symbols relating to safety, occupational health and workplace environment including a statement on rights and duties of the company and the employees at clearly visible locations within the workplace
  • to arrange for the employees to wear personal protective equipment throughout the work period in accordance with the standards prescribed in Ministerial Regulations
  • to conduct workplace hazards assessment, to study on the effects that may be associated with these workplace hazards, to produce a safety, occupational health and workplace environment action plan and a workplace control plan in accordance with the criteria, procedures and conditions prescribed in the regulations of the Department of Labour Protection and Welfare (the “DOL”) and to submit findings from such workplace hazards assessments, studies and plans to the director general of the DOL
  • to comply with the notification obligations in respect of serious accidents that occur at the workplace or an employee is injured by work.

Labour Law Duties

Pursuant to the Labour Protection Act the directors shall be responsible for the following:

  • if the company has ten (10) employees or more, arranging to have the work rules in the Thai language which contains all matters required by the Labour Protection Act, to deliver a copy of such work rules to the relevant Labour Office and maintain a copy of such work regulations at the work of business
  • if the company has ten (10) employees or more, arranging to have the record of employees in the Thai language and to maintain such record at the place of business available for inspection by a Labour Inspector during working time
  • if the company has fifty (50) employees or more (no employee’s committee under the Labour Relations Act has been established), appointing a welfare committee which consists of at least five employee representatives who are elected by the employees to hold a meeting with the welfare committee at least once every three months
  • if the company has ten (10) employees or more, filing a report form on employment and working conditions to the relevant Labour Office within January of each year

Application for Changes of Corporate Records

The directors are responsible for the following filings with the MOC when changes occur at the Company:

  • filing the list of shareholders of the company with the MOC, no later than fourteen (14) days after the date of the annual general meeting of shareholders to be held every year
  • filing an application for the registration of any changes to the registered office of the company with the MOC
  • filing an application for any amendments to the AOA with the MOC, no later than fourteen (14) days after the date of the special resolution
  • filing an application for the registration of any appointments and removals of directors, no later than fourteen (14) days after the date of such change
  • filing an application for the registration of any increase/reduction in registered capital within fourteen (14) days after the date of the special resolution
  • filing an application for the registration of any company mergers with the MOC within fourteen (14) days after the date of the special resolution, and file an application for the registration of the new limited company formed by the merger within fourteen days after the date which it took place
  • In the event that a director intentionally or negligently fails to perform the above duties, the company shall be liable for a fine in a range of THB 10,000-20,000 for each offence, and each director may be personally liable for a fine in a range of THB 10,000-50,000.

Tax Filing

Directors are responsible for filing corporate income tax returns with the Revenue Department twice a year as follows:

  • directors must file a half-year corporate income tax return within two (2) months following the end of the first six (6) months of the accounting period. The amount of tax to be paid is calculated on either one half of the estimated net profits for the whole year, or on the actual net profiles for the first six (6) months of the accounting period.  A company selecting to pay tax on the actual net profits must submit a financial statement, which has been approved by an authorised auditor, together with the tax return
  • the tax paid for a half-year is treated as a credit in the computation of the annual income tax liability. It should be noted that the company will pay taxes on gross receipts instead of the net profit, and a company whose first or last accounting period is less than twelve (12) months is not required to file half-year tax returns
  • directors must file an annual income tax

return within one hundred and fifty (150) days from the end of an accounting period.  The tax return must also be filed together with an audited financial statement approved by the annual general meeting of shareholders Further, directors shall be responsible for withholding tax and submit it along with the withholding tax return (for taxes withheld from employees and withholding tax return for taxes withheld from vendors) to the Revenue Department within the seventh day of the following month.

VAT Filing

Directors shall be responsible for filing an application to register the Value Added Tax (VAT) with the Revenue Department before the operation of business or within thirty (30) days after its income reaches the threshold.

Currently the annual turnover threshold is  THB 1.8 million (2015).

Further, directors must file a monthly VAT return.

Social Security Fund (Pursuant to the Social

Security Act 1990) and Workmen Compensation

Fund (Pursuant to the Workmen’ Compensation Act 1994)

If the company has one (1) employee or more, the directors shall be responsible for:

  • filing an application to register the company as an employer with the Social Security Office within thirty (30) days from the date of having one employee or more
  • filing an application to register the employees of the company with the Social Security Office within thirty (30) days after the commencement of their employment period
  • making equal contributions to the Social Security Fund with the employee’s contributions which have been withheld by the company as part of the payroll process and remitting such contributions to the Social Security Fund by the 15th day of the following month

If the company has at least one employee, the directors shall be responsible for:

  • registering the employees of the company with the Workmen’ Compensation Fund within thirty (30) days after the commencement of their employment period
  • remitting the contributions to the Workmen’s Compensation Fund by 31st March every year

Latest version updated 10th April 2018

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