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 - 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 - A woman scorned

THAI LAW - A woman scorned

Thai law

                      Thai law | There was a case a while ago where a foreigner, after moving to Thailand, struck up a relationship with a Thai girl.  The couple stayed together for many years and life was good.  However the foreigner never actually married the Thai girl.  He was independently rich and owned a lot of property on the form of houses, cars and motorcycles, all in his name.  The Thai girl received an allowance from him every month of 10 to 20 thousand baht.  But all was not well and the foreigner got into serious trouble.

                      They had been together for 8 years when things started to turn sour.  Constant fights broke out and misunderstandings which led the foreigner to kick the girl out of his house and sying he didn’t want to see her again.  She couldn’t return as he had also locked her out.  The Thai girl was not very happy, to say the least.  Her clothes and possessions were in the house and she wanted them back.  She tried several times to break into the house to no avail.  She finally managed to break in by jumping over a fence and breaking a lock.  Following the removal of her possessions, she had a face to face meeting with the foreigner who was not at all happy that she had broken into his house. Arguments turned into a fight and the foreigner assaulted the girl.

                      The Thai girl didn’t like what had happened but took no further action regarding the assault and went about her way.  A few days later, she broke into the house again but took nothing!  Everything was fine for the next few days until the police turned up at the foreigner’s house with an warrant to search the house.  They duly carried out the search and uncovered a stash of unregistered guns and ammunition.  Despite the foreigners insistence that he knew nothing of the weapons, the case was presented to the public prosecutor.  The foreigner was taken to court charged with possession of unregistered weapons.  This is a very serious offence under Thai law and worse for a foreigner.

                      Unlike the west, where breaking off a relationship quite amicably and each party goes their own way, in Thailand the injured party (in this case the Thai girl) will not let it go.  After all, she lost the most having spent a chunk of her life with the foreigner with no return.  She will want some form of justice or you may call it revenge.  She created a situation putting the foreigner in dire straits.  If you’re going to split with your partner, then try to do it in a nice way where both parties are happy. In this case, a judgment from the court is still pending.  In the meantime, the foreigner has had to submit huge amounts of cash for bail, had his passort confiscated by the courts which debars him from leaving the country without the court’s permission. Remember, if you push someone into a corner, they will fight back.

THAI LAW - A woman scorned

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

THAI LAW - Flood and Insurance

THAI LAW - Flood and Insurance  

Thai law

                            Thai law | At this time if there is anyone not talking about the flood situation here in Thailand it would seem to be that those people are not in trend right now. Because our main office is located in the heart of Bangkok we have seen many things affect the capital from the last few years and this year again it is no different. From the yellow shirt protest which closed down the main airport three years ago to the red shirt protest two years ago in the Ratchaprasong area, but this year it did not come from any colour but from nature itself. As many people can attest the power of nature is more powerful and devastating than that a human protest with many lives and homes being swept away. Because of the severity of the situation we will be forced to close the main office for some time, but even while we are still running there are few people left let alone out and about in this part of the city. In fact only around a tenth of the usual amount of people are still here, this has made traffic scarce and you can travel on a road in any direction and a trip that would take you hours before would only take five minutes right now.

Thailand law

                            So the topic we will discuss today is insurance from the flood situation happening now, especially regarding motor vehicles. If you look at the local news on the television or even on newspapers you will have seen many flooded cars and motorbikes on the streets on Bangkok. Most owners will have insurance but I have to tell you that maybe they will not cover your vehicle because of the extensions in their insurance policy. Even if they do have to cover something they will try to find ways around it, an example is this if a car engine is damaged by the flood for a long time and the engine develops rust and cannot function properly. The insurance company will consider only repairing the engine with the smallest amount of money possible, they will never allow a full engine change. Many things like this will happen in the coming months as the insurance companies will be responsible for a huge number of flooded cars, and you will see the extensions of your insurance policy that you have never seen before. Under Thai law, an insurance company is obligated to honour their agreement with you to the letter.  Failing this they can be taken to court.

Thai law

                            It will be a hard process to go through from the insurance companies saying no to fix your vehicle in the proper way. This is the main reason that insurance companies do not grow fast in Thailand, because the insurance companies will always try to say no and if they are obligated to pay they will make it very hard to do so making the customers not happy with the service they have paid for. Another thing you should know is that if you have an old car the parts they will use to repair your vehicle will either be second hand parts or parts from a copy brand not the original parts from the manufacturer. They will try to do everything they can to reduce costs. We have the experience in the court where an insurance company did not want to pay more than two hundred thousand baht when they were legally obliged to.  If you ask to claim that much money from them the company will fight with you in the Thai court, they have their own lawyers, who they will use to delay and play with you for up to three to seven years.

Thai law

                            This is the good chance for you to learn a lesson about the insurance companies here in Thailand. You have to make sure that the insurance policy that you take out for yourself is proper, with too many extensions so the insurance companies have to pay up and cannot get out of it so easily. You need to read through the agreement thoroughly if needed you can make amendments for some of the extensions by paying a premium, if you leave it until the situation happens it will already be too late.

THAI LAW - Flood and Insurance