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Directors’ rights and duties in Thailand.

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directors’ rights and duties in thailand

This is a fundamental introduction to the company directors’ roles and duties in Thailand.

Every company in Thailand must have at least one director and shall be managed by a director(s) in accordance with the company’s regulations and the general meeting of shareholders.

Let’s start.

What is the role of a director in a Thai company?

  • Deciding by voting at the board meeting
  • Deciding on matters required by laws or proposed by the management
  • Setting goals, policies and strategies
  • Monitor, overseeing and evaluating

Who can be a director?

The qualifications for an individual to be a director are:

  • Must be at least 20 years old
  • Not incompetent or bankrupt
  • Can be a resident or non-resident

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Appointment, resignation and removal of a company director

How are directors appointed?

Directors can be appointed through the general meeting of shareholders. Only the majority of shareholder votes can appoint a new director for the company.

How do directors resign from their position?

According to section 1153 of the Thai Limited Company Law, any director who would like to resign must submit a resignation letter to the company and the resignation shall take effect from the date the resignation letter reaches the company. Directors who resign may also notify the Registrar of the resignation.

The resignation letter must include the director’s declaration to end his status as a company director and signed by the resigning director.

Removal of a director

Directors can be removed by a resolution passed at the general meeting.

When removing a director, problems may arise if he/she refuses to sign the resignation letter. If this happens, a shareholders’ resolution to remove the director should be obtained.

When to notify a change of directors?

If there is a change of company directors, the company must submit the registration to the Ministry of Commerce within 14 days of the change.

Duties of a director

Directors are entitled to follow statutory and fiduciary duties.

Statutory duties

The 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 keepings of 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 entitled 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

Fiduciary duties of a director are to:

  • Act in good faith and in the best interests for the company
  • Act with proper intentions
  • Avoid conflict of interest between personal and company matters

Powers of company directors

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).

Liabilities of a director

A director who does not comply with his/her duties or responsibilities are liable for the consequences that occurred, such as dismissal, pecuniary penalties, compensation to the company, shareholders or third party(s) for the loss.

If the director’s breach of duty results in a criminal offence, such as public cheating and fraud, defamation, forgery of documents or counterfeiting of currencies, he/she will be liable to criminal penalties as long as the offence occurred from the director’s action or negligence.

Claims against the company and the director

According to section 1169 of the Civil and Commercial Code, claims against the directors for compensation for injury caused by them to the company may be entered by the company or, in case the company refuses to act, by any of the shareholders.

Such claims may also be enforced by the creditors of the company in so far as their claims against the company remain unsatisfied.

Conclusion

Directors are a basic requirement of a company in Thailand and it is important that you acknowledge the roles and duties of a director to avoid any breach of duty.


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Acclime is Asia’s premier tech-enabled professional services firm. We provide formation, accounting, tax, HR and advisory services, focusing on delivering high-quality outsourcing and consulting services to our local and international clients in Thailand and beyond.

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