Company and Partnership Offenses in Thailand

Thailand has strict laws regulating the operation of companies and partnerships. Unlike in some other jurisdictions, violations of company and partnership laws are criminal offenses in Thailand and may result in either imprisonment or fines depending on the severity of the offense. Therefore, it is imperative, especially for foreign entrepreneurs who are less familiar with the Thai legal system, to become familiarized with the offenses related to operating a company or partnership in Thailand in order to minimize their legal liability. For the convenience of our clients, we have prepared the following chart listing some offenses under the Company and Partnership Offenses Act of B.E. 2499 (1956) and their respective penalties:

Failure to issue a share certificate to each shareholder or if a share certificate is issued in invalid format	10,000 baht fine
Failure to issue a certificate to bearer if it authorized by the company regulations	20,000 baht fine
Failure to maintain a registry of shareholders
Failure to register additions or amendments to the company by-laws
Failure to register change of directors within 14 days
Failure to notify the government of a change of the company address
Failure to organize annual general meetings
Failure to prepare and file a balance sheet according to the Civil and Commercial Code
Failure to distribute a dividend to shareholders
Destruction by the company director of company property that has been pledged	3 years imprisonment or 60,000 baht fine
Concealment or transfer of company property by the company director in order to cause damage to a creditor in light of an imminent lawsuit by the creditor	3 years imprisonment or 60,000 baht fine or both
Falsification or destruction of company documents by the company director in order to deceive shareholders to lose rights to which they are entitled	7 years imprisonment or 140,000 baht or both

The Company and Partnership Act also specifies a few offenses for which one may not necessarily be the company director in order to be held guilty or which apply before the company is registered. An example is an offense which is the situation where a person attends company meetings and deceives the company into believing that he is a shareholder or a proxy. Another is where a promoter publicly makes false statements in order to convince someone to subscribe to the shares of a company.

Company law in Thailand is complex. Foreign entrepreneurs interested in registering a company in Thailand are advised to consult with competent legal counsel.

 

Category: Business in Thailand, Company Law