Legal Responsibility of Companies and Their Management in Thailand

In Thailand, various business entities (including limited companies, partnerships, associations, and foundations) are governed by laws that define the duties of directors, managers, and investors. These obligations cover proper business conduct, accurate financial reporting, dividend distribution in line with profits, and holding meetings to advance organizational objectives.

When individuals managing these entities engage in misconduct, Thai law may hold them personally accountable for criminal acts that harm the company, its stakeholders, or third parties.

Our service include:

Corporate governance and compliance advisory
Director and management liability assessment
Fraud and misconduct investigation
Dispute resolution for stakeholders
Regulatory and statutory compliance support
Litigation involving corporate wrongdoing

Offenses Committed by Management

The Act Determining Offenses Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations, and Foundations B.E. 2499 outlines specific prohibited behaviors, such as:

Damaging, falsifying, altering, or destroying company records, documents, or securities
Making misleading entries or omitting key information in company records to defraud or deprive shareholders, partners, or the entity

Convictions can carry penalties of up to seven years imprisonment, fines up to THB 140,000, or both, depending on the severity of the violation.

Corporate Liability and the 2017 Amendment

To address corporate offenses more effectively, the Act on the Amendment to Legal Provisions Related to Criminal Liability of Representatives of Legal Entities B.E. 2560 replaced automatic liability with a standard requiring proof of direct responsibility. Key points include:

Direct accountability: Directors or managers are liable only if it is proven that offenses resulted from their instructions, actions, or omissions.
No automatic guilt: Individuals are not presumed responsible solely by virtue of their position.
Scope of liability: Directors acting in good faith are generally protected unless evidence indicates involvement or negligence.

This amendment applies to a wide range of legislation, including the Revenue Code, Consumer Protection Act, Telecommunications Act, and Anti-Money Laundering Act, emphasizing the distinction between deliberate wrongdoing and unintentional association with corporate misconduct.

Practical Implications for Companies

Management must maintain rigorous governance standards, ensuring that operations comply with applicable laws and ethical practices. Directors and officers should:

Monitor company activities and records to prevent fraud or mismanagement
Implement internal controls and compliance procedures
Seek expert legal guidance when disputes or potential violations arise

Base Law Firm’s Expertise

BASE Law Firm offers comprehensive support for businesses navigating corporate criminal liability in Thailand. Our services include:

Advisory support on governance, compliance, and corporate responsibilities
Representation in disputes between business partners, shareholders, or regulators
Mediation and settlement strategies for high-stakes conflicts
Full litigation support when legal action is necessary

By combining legal insight with practical strategies, we help clients protect investments, uphold corporate integrity, and ensure that management acts within the boundaries of Thai law.