The leadership structure of companies can evolve as they grow and scale their operations. The addition or removal of a director may become essential during this process. There can be various other reasons that may seek this change. There is a specific procedure to change or remove a company director in Thailand.
This article provides a detailed explanation of this process and the necessary steps to be taken.
General Conditions to Change the Director of a Company
Several factors necessitate the change of directors in a Thai Limited Company, including:
- Resignation or departure of a director
- Death of a director
- Bankruptcy or mental incompetence of a director
- Appointment of a new director
- Removal of a director from their position
- Retirement of a director
- Rotation of a director during the Annual General Meeting
Eligibility to be a Company Director in Thailand
Before you change or remove a company director, you should have someone who can take his/her responsibility as a successor. To execute this process, the first information that you must have is the candidature eligibility. To serve as a director in Thailand, individuals must meet specific qualifications:
- They must be at least twenty-one years old so that they can sign the application and its supporting documentation.
- They must possess mental competence and not be declared bankrupt.
- Residency status is not a requirement; both residents and non-residents are eligible.
What to do before Changing Company Director in Thailand?
Once you have checked and verified that your candidate to be the new director of the company matches the eligibility pointers, you will have to proceed with the following steps.
In case of a Director’s departure, the company must convene either a Board of Directors meeting or a Shareholders’ meeting. The agenda depends on the company’s circumstances and any stipulations outlined in the Thai Commercial Code or the Articles of Association.
According to the Thai Commercial Code, during each annual general meeting of shareholders, one-third of the directors are required to resign rotationally. However, directors who resign can be re-appointed to their positions. Additionally, new replacement directors can be appointed during this shareholders’ meeting.
During a shareholders’ meeting, the shareholders have the authority to remove a director from their position before the conclusion of their term. Only a resolution approved at the shareholders’ meeting can result in the director’s removal from their position.
In the absence of specific mention in the Articles of Association, granting the Board of Directors the authority to resolve changes in a director’s authority, a resolution must be passed during a Shareholders’ meeting. This resolution requires the approval of a majority of the shareholders’ votes to be deemed valid and effective.
Process to Change Company Director in Thailand
Convene A Board of Directors Meeting
The Board of Directors is responsible for convening a shareholders’ meeting to pass a resolution to alter the company’s director or the director’s authority.
If the company’s Articles of Association state that the Board of Directors has the authority to modify the director’s authority, no shareholder meeting resolution is required for such a change.
The notice to convene a Board of Directors meeting shall adhere to the company’s Articles of Association rather than any specific legal requirements.
Organize A Shareholders’ Meeting
Under the corporate guidelines, companies must provide adequate notice for shareholders’ meetings. This notice must be published in a local newspaper no more than seven days before the scheduled meeting date.
Additionally, registered mail is required to notify shareholders listed in the shareholder registry. The notice will be deemed received upon sending the registered post to the shareholder’s listed address. This process must be completed seven days before the meeting.
Shareholders’ meetings can only be held if at least one-quarter of the company’s shareholders are present.
Unless otherwise specified in the company’s Articles of Association, notice to call for the shareholders’ meeting shall be sent to the shareholders at least seven days before the meeting.
Complete Legalities with the Departing Director
Upon approval of the director change by the shareholders and/or the Board of Directors meeting, the necessary forms will be prepared. The departing director and the authorized director(s) of the company must sign these documents. It’s important to note that the director must be physically present in Thailand during the signing process.
Update the change at the Department of Business Development
Upon completing and signing the forms, they need to be filed at the Department of Business Development. Within 24 hours of submission, the company must update its company affidavit to reflect personnel changes.
Within 14 days of the change, the authorized ‘former’ director must submit the following documents to the Department of Business Development:
- A copy of the resolution that was passed
- Application forms for changing the director and/or the authority of the director
- Signed copies of the ID cards/passports of both the old and new directors
Documents for Changing a Company Director in Thailand
To change a director in a Thai Limited Company, the following documents are needed:
- Copies of the new and old directors’ passports and addresses
- Approval letters from government agencies for strictly regulated businesses
- A death certificate in case of a deceased director
- A court order in case of company rehabilitation
Additional Information:
In Thailand, according to the law, directors who intend to resign from their positions must submit a formal resignation letter to their company. The resignation takes effect on the date that the company receives the letter. Resigning directors have the additional option to notify the Registrar of their resignation within 14 days of stepping down.
The written resignation letter must include a declaration by the director expressing their intent to end their directorship and be signed by the director.
Through a resolution passed at a shareholders meeting, a director can be removed from their position. If the director refuses to voluntarily resign, a shareholders resolution will be necessary to remove them from their position.
The Bottom Line
A Director is one of the crucial pillars of a company. Various core and ancillary responsibilities depend solely on the decision of the departmental or managing director. Therefore, while changing a Director, you should be very cautious about maintaining the legalities properly.
In the case of a resignation, the process is smooth, but, otherwise, there can be issues to resolve which you will need the assistance of a corporate law firm in Thailand. To discuss with us about your company today, email us your concern to change company director in Thailand at [email protected].
