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Thailand Corporate Law: Non-Executive Directors

Transcript of the above video:

As the title of this video suggests, we are going to be discussing non-executive directors here in the Kingdom of Thailand, specifically on corporate entities, limited companies specifically.

What are we talking about with respect to Non-Executive Directors?  Well pursuant to the Thai Civil and Commercial Code, as well as other aspects of Thai Corporate Law, there are Directors that can sign for the company and thereby bind a company based upon that signature: so contracts things like rental agreements etc. an Executive Director, what I would call an Executive Director can sign documentation and bind the company. Non-Executive Directors, those without those without signing authority on the company, cannot do that; they do not have the ability to bind the company based on their signature.

In smaller operations this is very rare to see. In larger corporations especially public companies you will often see Non-Executive Directors aka Directors without signing authorities it is not uncommon. Depending on the structure of the company, sometimes small family businesses, you may see someone who has been an Executive Director for a fairly prolonged period of time continue to be a Director but take a non-executive role where they basically no longer have signing authority over the company. Again not uncommon to see as I said in sort of smaller family-based corporations but a relatively rare thing to see, this is especially the case in company set up by foreign nationals who are running a small business here in the Kingdom as most of those folks tend to want to go ahead and be one of a few directors and definitely a signing director or will be a single loan director and there are various pros and cons to having multiple directors as opposed to having one single director.

Basically the thing to take away from this video is basically, non-signing or non-executive directors do exist in the Kingdom of Thailand. They basically are exactly what their name implies, they do not have the power to bind the company but they can sit on the board. They kind of are almost sort of an observer or emeritus type of position but they do exist and there are various companies that will have them on their Boards here in the Kingdom.