THAI LAW - Share holders

 THAI LAW - Share holders

Thai law

                 Thai law |  When setting up a company, it is important to be aware of the importance of the shareholders. You may want to set yourself up as the Managing Director but that position doesn’t hold any real power over the company and is just another employee.  The real force behind the company are the shareholders.  They are the real owners.  They control everything to do with the company from direction to major decisions.  If your company has a problem, a shareholders meeting needs to be called and the shareholders can vote on a solution to the problem.  Voting is not always straightforward with one vote per share.  This depends upon the way the company was set up.  There may be preference shareholders and the regulations may state how many votes are allocated per share. i.e. 5 votes per share, 10 votes per share etc.

                  As a majority shareholder you can do  as you please with the company because you own most of the company and therefore in full control.  The Managing Director can not dictate to a majority shareholder the policies or the execution of those policies.  He/she is not in control. The Managing Director’s responsibility is to understand the strategy set up by the shareholders and execute policies accordingly.  If the Managing Director fails to fulfill his duties or refuses to act in the best interests of the company then they can be held responsible for an offence against the company.  This is an offence under Thai law and can incur a penalty be it  a fine or a spell in prison.  Offences such as:

• A 20,000 baht fine for not making public a shareholders meeting.
• 50,000 baht fine if the balance sheet and accounts are not kept up to date.
• A sentence up to 7 years for changing the names of shareholders in order to steal shares.  This is a serious offence.


                  Whether the company is a small one, a large company or a public company, Managing Directors are still just employees.  Their task is to adhere to the needs of the shareholders and should conduct their work efficiently and with transparency.  There are many occasions in Thailand where a foreigner has set up a company and made a family member the Managing Director.  Because the role is seen as the highest position, they often abuse their responsibilities and fail to fulfill their duties.  There are many cases like this in the courts of Thailand.  It needs to be remembered that offences committed against the company are criminal and not a civil offence and can end up with a custodial sentence.

THAI LAW - Share holders

THAI LAW - Leased property from a spouse

THAI LAW - Leased property from a spouse

                        Thai law | There are a large number of foreigners who come to settle and live here in Thailand; many spend large sums of money to buy a house and land under the name of a Thai spouse with the aim of leasing for themselves for up to thirty years which can be for the term of their natural lives. This arrangement is usually fine but problems arise when the partners divorce or become separated and the Thai spouse does not agree to return the property to the foreign partner. This usually forces the foreigner to submit a court case against their spouse to declare that the funds used to purchase the property was brought into the country from abroad by them for the specific purpose of buying that property. Because they cannot hold the land under their name they were forced to put it under the spouses name then leasing it back to them. This is illegal under Thai land and if you declare this in court then the judge will order an auction of the property and return the money back to the foreigner.

                        Occasionally the judge will try to compromise between the two parties and share the funds fifty-fifty between the spouse and the foreigner. If this occurs then it is possible for the Thai spouse to return half of the sum and then keep ownership of the property, but usually the Thai spouse will not have the required money to pay back and will keep the case in court. Thus the property will be put on the auction market and resolved as previously mentioned, but during the court proceedings there may be a criminal charge of forgery against the foreigner as it is illegal to own property in this way under Thai law. Actually they didn’t make a lease contract just to lease the land but to protect their investment, a forgery case for a foreigner is a serious case with the penalty if convicted being seven years imprisonment. This can become a tool for the other party to use against the foreign to force a settlement and compromise, always be careful of your actions and protect yourself by ensuring you are operating within the limits of Thai law.

                        If you are in court and are offered a compromise agreement to finish the case, it is recommended to proceed though it is dependent on a case by case basis. The point is that the judge also understands that it is your money and you will be the one that will lose if money is not returned to you. The way to go about business like this should always be made with the proper advice and counsel from a legal aid or business professional in this field. Always make sure that you are protected and are in the right in any business dealings. One thing to keep in mind is that immovable property such as land cannot be held under a foreign citizen but movable property such as a house built on that land can, as such it is possible to go about this process legally. It is always better to lease the land from a third party than from a spouse as it will seem like the two parties have conspired to circumvent the law.

                        What is right or wrong by law is not difficult to ascertain, usually all it takes is common sense and it can save you from getting into a lot of trouble. Actually if you execute a proper lease it is totally fine and legal, it also has the benefit of being cheaper alternative to a transfer of ownership. Though through leasehold you do not have the right to own property, you only the right to possess it and depending on the contract made there are many options still available to you.

THAI LAW - Leased property from a spouse

THAI LAW - Compromise

THAI LAW - Compromise

Thai Law Compromise

                       Here in Thailand’s court system whenever you have a case between two parties; civil or criminal, you will always have the chance to compromise the case. Even a murder case that is submitted by a private person can be compromised with the case withdrawn at anytime, though there are limits to this power. Big cases such as drugs or a murder case that is being prosecuted by a district attorney or the police cannot be compromised by the law though the punishments may be altered by a judge within the boundaries of the law according to their judgment.

                       Another way that compromising works with Thailand’s legal system is through the Thai police. Small cases such as car accidents etc. can be compromised by the police; this extends to civil cases such as damages, enabling them to settle and then terminate a case before it reaches the court system if both parties agree. If the two sides do not agree they will then have to go through the court system to seek justice, this is usually a waste of time and resources and even if you are in the right it can take years to receive compensation. Though it depends on a case by case basis, what type of case and what they stand to win.

                       During any court process between two parties the court will always try to get both parties to negotiate in an effort to move the process along quickly and smoothly without wasting the resources of the court whilst operating within Thai law. It seems to be that compromising is usually to the benefit of all parties involved as the party that needs to pay up can negotiate a lower fee to close the case, the party that is in the right will receive payment of damages or compensation swiftly though it may not be the full amount owed and the court will close a case that could be fought over for years to come. You should always be prepared to compromise or at least listen to the other parties offers as the Thai court process is slow and requires a lot of patience.

                       It is the courts job to be fair and they will always try to work for the benefit of all parties involved. By having a system in place that places negotiations and mediation first, it allows most cases to be talked out and conflicting sides to be able to come to an agreement if possible. Though they will give you every chance to make a deal, once a case has gone past that phase there is no turning back. The court will stress to the prosecutor that they may stand to win nothing at all if they were to lose the case, along with lawyer fees stacking up as well. With the alternative of getting payment today or in the near future to a reasonable sum from the amount requested. Taking a case or a disagreement to a courtroom has been known to be a negotiation tactic before, whereby the party takes another party to court in order to get a better price on the amount of money they feel they’re entitled to.

                       Though we are experts when it comes to the Thai legal court process, we will always recommend you to exhaust your options first. Many clients are culture shocked when they experience the Thai justice system themselves for the first time; it is not like in the west or any other country as a matter of fact and can be confusing and exhausting. By protecting yourself and having the right advice and counsel you will be prepared and will be able to make the decisions that are right for you.

THAI LAW - Compromise

THAI LAW- Family Court & Juvenile Centre

THAI LAW- Family Court & Juvenile Centre

Thai Family law 

                             Thai law | Usually a divorce that is between partners who have children will continue with custody proceedings, child custody can be a simple or difficult process depending on different factors and conditions. If you have any case in family court that involves custody you will have to go to the local province Juvenile Observation and Protection Centre to make the statement before you can proceed in the court. Or if a case concerns a juvenile that is younger than 18 years old and get a criminal charge then this office will help to check the bio data records and criminal records. These records are regarding the history of the juvenile such as any drug history including smoking; sexual relations past conduct such as criminal records etc. The Thai courts will always strictly consider these reports as they are a third party that is also a government office that is set up to report the truth and provide vital information to the court systems.

Thai law

                             If a young person in the criminal court is convicted of a crime under Thai law then this office has facilities for detention which is an alternative to jail. They will be given a suspended sentence and may even be allowed to stay at home with family wither immediately or after a certain amount of time has passed. This is subject to certain conditions set by the court that takes in factors such as the severity of the crime, past offenses and whether the family is able to properly support and care for the child. This is similar to a parole system as the child will have to report back to the facility every three, four or six months depending on the court order and be subjected to drug tests and interviews with both the child and parents on their progress. This is also the responsibility of this office.

Thai law siam firm

                    The Juvenile office also can investigate custody cases by interviewing children themselves, such as in cases where a parent is requesting sole custody. The questions asked will include which parent the child is more suitable to care for them and which parent they would like to live with and why. The accuracy of these reports is usually accurate as they are trained professionals and the family court takes these reports very seriously when deciding how to act in a custody case. In family court if a divorce is filed the court doesn’t worry about who you are but will care more for the future of the child or children, this is always their focus. If you’re a good person and in a good financial situation then the court will always give benefit over a bad person who is in a bad financial situation, as they care for the children’s security and welfare.

Thai law

                             What you have to do is prove to the court that you’re good enough to provide this care and will do your utmost to keep the interests of the child or children a top priority. Parents who win custody will have to follow strictly what is in the court order, if they don’t then they may end up losing custody altogether. An example is a case where a mother who had a job that requires frequent trips overseas had filed and won sole custody of her daughter, but as she had to continue to travel overseas she left the daughter in the care of her mother for large amounts of time. After discovering this the father sued for custody and won as the mother was breaching the court order that was issued.

Another example is when two parents receive joint custody and then the mother took the child away from her house and to another province, this is a breach of the court order and the father submitted a petition to the court. This resulted in the court issuing a warrant of arrest as the mother did not respond to the court summons to bring forth the child. If you ask for your rights and you receive the backing of the court you must adhere to what is agreed or maybe one day you will lose that right altogether or even have a warrant issued with your name on it.

THAI LAW- Family Court & Juvenile Centre

THAI LAW - Passports, your personal property

THAI LAW - Passports, your personal property

Thai law

                            Over the years I have seen many times the people who were cheated or had suffered losses due to fraud or a scam going to a police station with the offender to sort out their problem. Normally the police will try to get them to compromise with each other by being the middle man, they will try to negotiate between the two parties and ask if or when the offender can pay back the amount owed whilst scheduling another meeting at a future date to check on the situation. After the negotiations on the condition of the agreement on both parties the case will be dropped for a while and the police will ask you to pay back the money owed in a future date normally a week to two weeks. This is always the case with the police including other situations such as accidents etc. not just fraud or cheating cases. After all this the police will tell you that you will have to leave your original passport with the police until the time that you pay back the sum when the passport will be returned.

                            One such case concerned three parties’ two men and one woman, the two men being business partners and the woman being the girlfriend of one of the partners. The lady was brought to the police station by the business partner of her boyfriend and was accused of cheating nine million baht from him. She argued that she did not have anything to do with it or any of the money at all and claimed it was all concerning her boyfriend. But the business partner argued that they had sometimes transferred company funds to her bank account in Singapore, on realizing this woman became scared but still stuck to her story. The lady said to the police that she would try to talk to her boyfriend about how to pay back the money he owed but it would be difficult as he was arrested regarding another case.

                            At that time the police said that if you are planning to pay him back can you give me your passport and then come back to talk with each other again about the plan. After this agreement and handing the passport over, at the next scheduled meeting she found out that the business partner had no evidence whatsoever of sending money to her account. After this she should have been let go with no legal obligations whatsoever but this was not the case at all. Because the business partner did not drop the case and kept trying to find a way to take the case to court and would not stop until the police allowed him to do so. The legal proceedings took a very long time, in fact almost 3 years during which the lady could not travel abroad due to her passport being property of the court. At the end of the case the defendant was found to be innocent which was the case since the start but because of her passport being in the hands of the police it she was dragged into a long and drawn out process. Unless there is evidence of your wrongdoing, then under Thai law, the police have no authority to retain your passport.

Thai law

                            If you wish to settle a similar case quickly then please go ahead and try to make a compromise with the other party with the help of the police and schedule another appointment at the station at a later date. But make sure that you do not hand over your passport, if it is like the above story then if there is no evidence you are free to go, you can fly out of the Kingdom, you can work normally and do everything you would normally do. But if you give your passport over to the police then it is like you are saying that you are the guilty person and you are agreeing that you have to pay back the necessary amount to the other person. Your passport is your personal property which should be on you at all times similar to a Thai citizens ID card, for something like this the police cannot force you to hand it over and they have no legal authority to make you.

THAI LAW - Passports, your personal property