The main types of legal entities under Thai law are:

• private limited companies;
• limited partnerships; and
• public limited companies.

The formation and management of private limited companies and limited partnerships are governed by the Civil and Commercial Code (CCC), whereas public limited companies are governed by the Public Companies Act.

The most common type of legal entity for doing business in Thailand is a private limited company, which will be the main focus for the remainder of this guide. Unless otherwise explicitly stated, the responses relate to requirements under the CCC that are applicable to private limited companies.

At least two shareholders are required in order to form a private limited company. Private limited companies are legally represented and managed by one or more individual directors under the supervision of the shareholders. Private limited companies must have a registered address in Thailand; a virtual office address is acceptable only in limited circumstances (eg, holding companies without any business operations).

It is also possible to register a branch or representative office in Thailand of a company incorporated under a foreign law. However, such forms of business are less common as they are subject to various legal and practical limitations.

Foreign investors generally use private limited companies to operate their businesses in Thailand, as this type of company is easiest to incorporate and manage.

However, if 50% or more of the total number of shares issued by a Thai company are owned by foreigners, the company itself would be considered a foreigner under the Foreign Business Act (FBA), which generally restricts foreigners from engaging in most business activities in Thailand. In order for a foreigner to engage in any restricted activities under the FBA, approval in the form of a Foreign Business Licence (FBL) must be obtained from the Foreign Business Committee, or the foreigner must otherwise be exempted from such restrictions.

Alternatively, foreign investors may register a branch office of a foreign company in Thailand instead of incorporating a company under Thai law, but such branch office must either apply for an FBL or qualify for an applicable exemption in order to engage in any restricted business activities.

Apart from an FBL, other permits, licences and registrations may also be required under certain industry-specific laws, which may have specific requirements on the nationality of shareholders and/or directors of companies that are allowed to obtain the necessary permits or licences, thereby limiting foreign investment in the relevant industry. For example, the Land Transport Act requires holders of a land transport licence to have at least 51% Thai shareholders and at least 50% Thai directors.

Companies can issue two types of shares under Thai laws: ordinary shares and preference shares.

Regardless of the type of shares held by them, all shareholders have the right to:

• attend the shareholders’ meetings;
• cast a vote at such meetings;
• receive dividends from the company; and
• access and make copies of basic documents of the company, such as audited financial statements and the shareholder registry.

In addition, if the company is dissolved and liquidated, all shareholders are entitled to receive a return of their residual share capital and retained earnings (if any) after the company has paid off all its creditors.

Preference shares usually have different voting rights and/or dividend rights from ordinary shares, but that is not always the case. Preference shares may also come with the right to be first in line to receive dividends and/or residual capital from the company. Restrictions on transfers of preference shares may also be different from those of ordinary shares. Details of such differences must be described in the Articles of Association (AOA) of the company and cannot be subsequently amended.

All shares of the same type must have the same voting rights and dividend rights. However, it is possible for a company to have more than one type of preference shares. Different types of preference shares may have different voting rights and dividend rights.

Apart from different types of shares, it is also possible to divide shares of the same type into different groups with different ancillary rights other than voting rights and dividend rights, which must always be the same for the same type of shares. For example, a company may divide its ordinary shares into three different groups and give each group the right to nominate a number of persons to be appointed as directors and executives. It is also possible to give a certain group of shares veto rights on certain critical matters of the company. These differences are usually described in either the AOA of the company or an agreement between the shareholders.

The CCC does not allow amendments of preference share rights. It is also not possible to directly convert preference shares to ordinary shares, or vice versa.

Nevertheless, it is possible to further issue a new type of preference shares by passing a special resolution at a shareholders’ meeting. A special resolution requires at least 75% affirmative votes of the shareholders present and eligible to vote at the meeting.

In cases where all shares of a company are ordinary shares but are divided into different groups with different ancillary rights, amending such rights is possible but a special resolution is required in order to amend the AOA. If such rights are also described in a shareholders’ agreement (if any), amending such rights typically requires the consensus of the parties to the agreement.

The CCC does not directly specify the minimum share capital requirement of private limited companies. However, it does require that the par value per share must not be less than THB5 and there must be a minimum of two shareholders. As such, conceptually, it is possible to incorporate a private limited company with a minimum capital of THB10. In practice, however, the company registrar may reject an application to incorporate a company with “too low” capital, although there is no clear guideline as to what constitutes “too low” capital.

Nevertheless, the minimum capital of the company may be determined by other applicable laws. For example, the FBA requires foreigners (including a company incorporated under Thai law but with 50% or more of its shares owned by foreigners) to have at least THB2 million capital for each non-restricted business and at least THB3 million capital for each restricted business. As another example, the work permit law requires the employer company to have THB2 million capital for each foreign employee the company wishes to employ in Thailand.

For private limited companies and limited partnerships, the CCC requires at least two shareholders or partners, as applicable. For a public limited company, at least 15 shareholders are required. There is no requirement under the CCC or the Public Companies Act for the shareholders or partners to have residency in Thailand. However, numerous Thai laws require shareholders collectively holding a majority of shares in certain businesses to have Thai nationality.

Shareholders’ agreements or joint venture agreements are commonly used for private companies to stipulate special restrictions and requirements that are not prescribed in the CCC. The most common issues described in shareholders' or joint venture agreements are share transfer restrictions and rights of different groups of shareholders to nominate their representatives to be elected as members of the board of directors.

Shareholders’ or joint venture agreements typically include provisions concerning the following key issues:

• the main business of the company;
• a desirous shareholding structure and mechanisms to achieve it, if not already in place at the time of signing the agreement;
• share transfer restrictions and related mechanisms, such as the right of first refusal, put and call options, tag-along and drag-along rights, etc;
• management and control of the company, including the rights of different groups of shareholders to nominate directors and key executives;
• reserved matters, such as changes to the company structure, by-laws or main business, entering into or terminating high-value contracts or related-party transactions, etc; and
• deadlock scenarios and how to solve them.

Shareholders’ or joint venture agreements are generally enforceable in Thailand but only between the parties to the agreement, provided that they are not fundamentally different from the Thai company law or otherwise contrary to the public policies. Such agreements are not publicly available.

As a matter of practice, the key provisions of shareholders’ or joint venture agreements, especially those regarding control over the company and share transfer restrictions, are usually described in the company's AOA, which, unlike shareholders’ or joint venture agreements, are publicly available and can be enforceable against third parties.

All companies must convene an Annual General Meeting (AGM) of shareholders once a year, within four months from the end of the preceding fiscal year. Notice of an AGM must be sent to all shareholders of the company via acknowledgement-receipt (AR) registered mail or by hand at least seven full days prior to the AGM, unless a longer period is otherwise specified in the company's AOA. The notice period cannot legally be waived or shortened.

A typical AGM agenda includes the following items for consideration and approval by the shareholders:

• a report of the board of directors on the company’s performance in the past fiscal year;
• audited financial statements of the company and the auditor’s report;
• the appointment of directors in place of those who retire by rotation;
• the appointment of an auditor for the current fiscal year and their remuneration; and
• if applicable, a declaration of dividends and the allocation of funds to a reserve account.

In addition to an AGM, an Extraordinary General Meeting (EGM) of shareholders must be summoned by the board of directors when the company’s aggregate loss reaches 50% of its capital, or when shareholders holding in aggregate at least 20% of the total number of issued shares in the company submit a request in writing to the board of directors that an EGM be held to consider a particular matter. The board of directors may also convene an EGM whenever they think fit.

According to the CCC, notice of a general meeting (whether an AGM or EGM) shall be sent to all shareholders of the company at least seven days prior to the meeting date. However, in cases where a special resolution is required to be passed at a general meeting (eg, a resolution to amend the AOA, to increase or decrease the company’s capital or to dissolve the company or amalgamate it with another company), notice of said general meeting shall be sent to all shareholders at least 14 days prior to the meeting date. The AOA of each company may require a notice period of longer than seven or 14 days.

Notices of general meetings shall specify the place, date and time of the meeting, as well as the agenda to be transacted at such meeting. In cases where a special resolution is to be considered and approved at the meeting, the wording of the proposed special resolution shall also be included in such notice.

Notices of general meetings may be sent via AR registered mail or by hand. If the meeting is held via electronic means (eg, online meeting), the notice may also be sent via electronic means (eg, email).

Typically, a general meeting (whether an AGM or EGM) is called by the board of directors.

However, when shareholders holding in aggregate at least 20% of the total number of issued shares in the company request the board to summon an EGM and the board fails to do so within 30 days of receiving such request, the shareholders themselves may issue a notice to summon the EGM.

Shareholders are entitled to receive notice of general meetings. A minimum notice period of seven days is typically required, unless a critical matter that requires a special resolution is to be considered and approved at the meeting, in which case a minimum notice period of 14 days is required. The notice period might be longer than seven or 14 days, depending on the AOA of each company. Failure to provide notice of a meeting could lead to the revocation – through a court order – of resolutions passed at the meeting.

The meeting notice must contain sufficient details, including the meeting agenda, and the company is also required to send copies of its audited financial statements to all shareholders at least three days prior to the AGM. In practice, copies of audited financial statements are usually sent to all shareholders together with the meeting notice.

Generally speaking, shareholders do not have direct control over the business of the company nor access to in-depth information of the company. The CCC only grants shareholders the right to appoint and remove directors of the company and the rights to access the company’s shareholder registry, minutes books and audited financial statements. Shareholders’ access to further information of the company is subject to the co-operation of the directors.

Although the CCC does not grant shareholders the right to directly access other information and documents of the company, shareholders holding collectively at least 20% of the total issued shares in the company may request the Minister of Commerce to appoint official inspectors to inspect the company’s business and prepare a report of their findings. Directors, employees and agents of the company must give the inspectors access to any books and accounts of the company as may be reasonably requested by the inspectors. The final report will be shared with the company and with the shareholders who requested the inspection. All costs and expenses for such inspection are borne by the shareholders who requested the inspection, unless the shareholders approve at the first general meeting that follows the inspection that such costs and expenses be absorbed by the company itself. However, this measure is rarely used in reality.

Under Thai laws, shareholders' meetings can be convened either physically or virtually via electronic means (online meetings), unless otherwise specified in the AOA.

However, virtual/electronic meetings must comply with additional requirements pursuant to the Emergency Decree on Meetings via Electronic Means and the Notification of the Ministry of Digital Economy and Society re Standards for Maintaining Security of Meetings held via Electronic Means, as follows:

• it must be possible to verify the identity of attendees prior to the meeting (through the use of a username and password, a One-Time Password, etc);
• attendees must be able to communicate or otherwise interact with other attendees during the meeting, whether by voice or voice and pictures;
• attendees must be able to access meeting materials;
• attendees must be able to vote both openly and by poll;
• the meeting must be electronically recorded throughout (voice or voice and pictures, as applicable), unless the meeting is considered confidential;
• electronic traffic data of all attendees must be maintained;
• there must be a process to report technical issues during the meeting; and
• meeting minutes must be made in writing.

The CCC prescribes that a general meeting of shareholders requires at least two individuals, who can be either a shareholder or a proxy holder of a shareholder, representing collectively at least 25% of the total share capital of the company to form a quorum. A single individual holding multiple proxies from multiple shareholders cannot hold a meeting by themselves even though the minimum requirement of the share capital percentage is met.

The AOA of each company may specify a quorum threshold that is higher than 25%.

Generally speaking, there are two types of shareholders’ resolutions:

• ordinary resolutions that require a simple majority; and
• special resolutions that require at least 75% of the votes of the shareholders present at the meeting and are eligible to vote.

The CCC prescribes that the following matters require a special resolution:

• amendment of the AOA or Memorandum of Association;
• capital increase;
• capital decrease;
• the amalgamation or merger of the company with other companies; and
• the dissolution of the company.

The conversion of a private limited company to a public limited company also requires a special resolution.

The AOA of each company may specify a higher threshold to pass ordinary or special resolutions. It is also possible for the AOA to specify certain reserved matters that require different approval thresholds or explicit consent from a particular group of shareholders. This is a common practice, especially in joint venture scenarios.

Pursuant to the CCC, the following matters require approval by an ordinary resolution (ie, a simple majority of the votes of the shareholders present at the meeting and eligible to vote):

• the appointment or removal of a director;
• directors’ remuneration;
• the appointment or removal of an auditor;
• the auditor’s remuneration;
• the audited financial statements and the auditor’s report; and
• the declaration of dividends

On the other hand, the following matters require a special resolution (ie, 75% of the votes of the shareholders present at the meeting and eligible to vote):

• amendment of the AOA or the Memorandum of Association;
• capital increase;
• capital decrease;
• the amalgamation or merger of the company with other companies;
• the dissolution of the company; and
• the conversion of a private limited company to a public limited company.

The AOA of each company may specify a higher threshold to pass ordinary or special resolutions.

Unless otherwise specified in the AOA, shareholder voting can be carried out either by a show of hands (one shareholder, one vote) or by poll (one share, one vote). However, if requested by at least two shareholders, the voting must be conducted by poll (one share, one vote).

If the company issues any preference shares, the voting rights of preference shares may be different from the voting rights of ordinary shares, as described in the AOA of the company. For example, a shareholder may have one vote for every ten preference shares or ten votes for each preference share. However, all shares of the same class must have equal voting rights.

Shareholders may appoint proxy holders to attend and vote on their behalf at any shareholders' meetings. However, they would not be entitled to vote if their share capital is called but remains unpaid. Under Thai law, private limited companies may issue shares with partial share capital payment at the time of issuance. The remaining unpaid capital may be called upon at any time by the board of directors. If the remaining share capital is called but unpaid, the relevant shareholder would not be entitled to vote at any general meeting. Shareholders may also be deprived of their voting entitlement if they have any special interest with respect to the resolution being voted.

The appointment of a proxy holder must be made in writing. A proxy form must contain the minimum details required by law.

Shareholders can cast votes electronically, especially when the meeting is held via electronic means (eg, online meeting).

The CCC prescribes that a general meeting notice must be given to all shareholders prior to the meeting date (at least seven days or 14 days, as the case may be) and the notice must specify the place, date and time of the meeting, as well as the agenda to be transacted at such meeting. Shareholders’ meetings are typically summoned by the board of directors. Therefore, if any shareholders wish to have any specific issue considered at a shareholders’ meeting, the shareholders would typically request the board to include it in the agenda when the board approves the convening of the shareholders’ meeting.

However, if the board refuses to include such an issue in the shareholders’ meeting agenda, the shareholders may summon a shareholders’ meeting by themselves, provided that they collectively hold at least 20% of the total issued shares in the company.

The CCC grants any shareholders or directors of the company the right to challenge any resolutions that are purportedly passed in violation of the CCC or the AOA of the company (notice was not properly given, the quorum was not met, the required approval threshold was not reached, etc). Such challenges must be brought before the court within one month from the date of the meeting.

Institutional investors and other shareholder groups are more prevalent and have more influence on public companies than private companies.

The most well-known shareholder group is the Thai Investors Association (TIA), which usually owns a small fraction of shares in listed companies and actively participates in shareholders’ meetings of listed companies. The TIA publishes corporate governance guidelines, arranges seminars on shareholders’ rights and other related matters, and publishes rating scores on its website assessing how well each listed company held its AGM by taking into account transparency and the disclosure of information to the shareholders, shareholders’ participation, how well the AGM was organised, etc. Some institutional investors consider the TIA’s rating of companies in which they would like to invest, in conjunction with other factors.

Another organisation that focuses on promoting good corporate governance and monitors listed companies’ actions in that regard is the Thai Institute of Directors (IOD). The IOD provides a wide array of training, seminars, workshops and other personnel development programmes for different groups of persons working for listed companies, such as a director certification programme, a company reporting programme, a company secretary programme, a corruption risk and control workshop, etc. The IOD also regularly publishes corporate governance guidelines, reports and other publications by studying publicly available information concerning listed companies, their treatment of shareholders, the roles of stakeholders, transparency and the disclosure of information, the accountability of company directors, etc.

Both the TIA and the IOD work closely with the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC) to promote the corporate governance of listed companies in Thailand.

Generally speaking, it is legally acceptable for a shareholder to hold shares in a company through a nominee shareholder. This falls under the concept of an undisclosed agent under the CCC, whereby the agent acts as if they hold shares in the company for themselves but actually holds them on behalf of another person (the principle), who is not disclosed to the company or the general public. In such cases, the actual shareholder holding shares through a nominee would not have any right vis-à-vis the company (voting rights, dividend rights, etc), unless and until they disclose the nominee arrangements to the company and take necessary actions to replace the nominee as a shareholder in the company’s records.

However, please note that the use of a Thai nominee shareholder to circumvent a foreign shareholding limit under certain Thai laws is illegal and usually incurs criminal penalties. Thai laws that contain a prohibition on the use of Thai nominee shareholders include the Foreign Business Act (FBA), the Land Code, etc. Both foreigners and Thais who engage in nominee arrangements in violation of the FBA could be subject to a maximum imprisonment term of three years and/or a fine of between THB100,000 and THB1 million (roughly USD2,821 and USD28,209). Furthermore, if the offenders are ordered by a Thai court to cease the violation but fail to comply with such an order, they could be subject to an additional fine of THB10,000 to THB50,000 (roughly USD282 to USD1,410) per day throughout the period of the violation.

Written resolutions are not permitted under the CCC.

The creation of minutes describing a meeting that did not actually exist constitutes document falsification under Thai criminal laws. For example, making a reference to a meeting that did not exist in a company registration application filed with the company registrar constitutes making a false statement to the authority, which is also a crime under Thai laws.

To challenge a meeting that was not properly held (eg, without proper notice or quorum), a court case must be filed within just one month from the date of the meeting. By contrast, to challenge a meeting that did not actually take place (a paper meeting), a court case can be filed at any time within ten years.

Whenever a company issues new shares, the CCC requires that the newly issued shares must be offered to all shareholders in proportion to their existing shareholding. The offer must be made in writing to each shareholder, specifying the quantity of shares to which each person is entitled to subscribe. In addition, the notice must specify a deadline by which the offer will be considered declined. Once the stipulated deadline has passed or if a shareholder declines to subscribe to the offered shares, the company's directors are entitled to either permit other shareholders to subscribe to the remaining shares or subscribe to such shares themselves.

The CCC does not impose any restriction on transfers or disposals of shares. However, restrictions and related mechanisms (the right of first refusal, board or shareholder approval, tag-along/drag-along rights, etc) may be described in the AOA of the company or the relevant joint venture or shareholders’ agreement entered into between the shareholders. In addition, transfers of shares in some companies may require approval from a regulatory body pursuant to certain industry-specific laws or the antitrust law, under certain conditions.

To legally transfer shares in a Thai company, a proper share transfer instrument must be duly signed by the transferor, the transferee and witnesses, and must include the minimum details required by law. The transfer must also be duly recorded in the internal shareholder registry of the company in order to be fully effective.

Unless otherwise specified in the AOA of the company, shareholders may pledge their shares in favour of a creditor.

The following conditions must be met in order to create a legally binding share pledge:

• the relevant share certificate must be physically delivered to the pledgee;
• a written notice of the pledge must be given to the company; and
• the pledge of shares must be recorded in the shareholder registry of the company.

All Thai companies are legally required to submit an updated list of shareholders to the company registrar following their AGM each year. Lists of shareholders are publicly available.

However, there is no law that requires shareholders to disclose to the company their interests in other companies or businesses, nor does the company have any right to require such disclosure.

Nevertheless, shareholders may be required under the Trade Competition Act to report the acquisition of shares in the company to the Trade Competition Commission Thailand within seven days of completion if the share acquisition is considered a merger that may significantly reduce competition in a particular product or service market. This includes a scenario where, as a result of such acquisition, the total voting right of the shareholder concerned (inclusive of its related parties) exceeds 50% (if the company is a limited company) or reaches 25% (if the company is a public company) of the total voting rights in the company, and the company or the acquirer had a total turnover of THB1 billion or more in the previous fiscal year.

In cases where the company is listed in the Stock Exchange of Thailand (SET), shareholders are also required to report to the SET each time their shareholding reaches 5% or a multiple thereof of the total issued shares in the company.

Private limited companies can reduce their capital either by reducing the value of each share or by reducing the number of the total issued shares.

Private limited companies cannot buy back their shares. However, listed companies are allowed to repurchase shares from shareholders, in a practice known as treasury stock, in accordance with the criteria set forth by the SET.

Dividends can only be paid out of the company’s profits. If the company has incurred any losses, such losses must be made good before dividends can be paid.

Typically, a declaration of dividends requires a resolution of a general meeting of the shareholders. However, the board of directors may also declare interim dividends to shareholders if there are sufficient profits to do so. Once a resolution is passed, the company must disburse dividends to the shareholders within one month.

Every time a company declares dividends to its shareholders, the CCC requires that a minimum of 5% of profits must be set aside to a legal reserve fund until the fund reaches 10% of the company’s capital.

Directors can be appointed or removed by a resolution of a shareholders' meeting. Unless otherwise stated in the company's AOA, appointing or removing a director requires a simple majority of votes from the shareholders who are present and eligible to vote at the meeting.

In cases where a director leaves their office before the end of their term (for example, resigns or is disqualified), the board may appoint a replacement director to fill in the vacancy for the remaining term of the director who vacated the office.

Director changes must be registered with the company registrar in order to be legally effective against outsiders.

Shareholders do not have direct control over the day-to-day management of the company; management decisions are made by directors who are, in turn, appointed by and under supervision of the shareholders. Therefore, practically speaking, if the directors make any decision that is not in line with the shareholders’ interests, instead of challenging such decisions, the shareholders may remove and replace the directors with other persons, assuming that the shareholders have sufficient votes to do so.

If any director has caused damage to the company, the company itself is entitled to initiate legal action to seek compensation from the director. If the company does not pursue such legal action, any shareholder is entitled to do so on behalf of the company.

Nevertheless, if an action taken by a director is approved by the shareholders at a general meeting, those shareholders who granted their approval would no longer be entitled to file a court case seeking compensation from the director. Rather, only minority shareholders who disapproved the director’s action may file a court case and they must do so within one month from the date of the shareholders' meeting.

Auditors can be appointed or removed by a resolution of a shareholder’s meeting. Unless otherwise stated in the company's AOA, appointing or removing an auditor requires a simple majority of votes from the shareholders who are present and eligible to vote at the meeting.

Auditors must not be employees or directors of the company.

The CCC requires company directors to report the business results of the company to the shareholders each year at the AGM. The board of directors is also responsible for preparing financial statements and having them audited by an outside auditor who is appointed by the shareholders. The audited financial statements together with the auditor’s report thereon must also be presented to the shareholders for consideration and approval at the AGM.

All shareholders are obliged to pay the remaining unpaid share capital (if any) to the company upon request by the board of directors. However, majority shareholders do not have any particular duties or liabilities towards other minority shareholders of the company.

In cases where the company is insolvent, creditors may file a bankruptcy lawsuit against the company to try to liquidate the company’s remaining assets to pay off its debts, assuming that the outstanding debts are THB2 million or greater. If the company is eventually adjudicated bankrupt by the bankruptcy court, court-appointed official receivers will liquidate the company assets to pay off the company’s obligations. After all of the company’s debts are fully paid off, the remaining cash from the liquidation process (if any) may be distributed to the shareholders.

The shareholders may try to prevent the company from going bankrupt by causing the company to instead enter into a business rehabilitation process, subject to conditions under the Bankruptcy Act (for example, there must be grounds to turn around the company’s business) and approval of the bankruptcy court. If the court agrees to put the company under a rehabilitation process pursuant to a rehabilitation plan, a rehabilitation plan administrator – whether an outsider or the company’s director or shareholder – would be appointed by the court to implement the approved rehabilitation plan.

Generally speaking, shareholders do not have any legal remedies against the company. A shareholder may take legal actions against the company in very limited circumstance, such as:

• when a dividend resolution has been passed but the company fails to disburse dividends to shareholders within one month;
• when a board or shareholders’ meeting was not duly convened or a resolution was not duly passed and a shareholder wants to legally nullify such meeting or resolution; or
• when the company refuses to accommodate a shareholder’s lawful request, such as a request for copies of fundamental company documents to which the shareholder has the right to access or a request to record a valid share transfer in the company’s internal shareholder registry and issue a new share certificate to the transferee.

Generally speaking, shareholders do not have any legal remedies against the company’s directors/officers, unless a shareholder can satisfactorily prove to the court that the directors/officers in question undertook a wrongful act against the shareholder personally.

In cases where a director breaches their fiduciary duties, the company may take legal actions against said director.

If the company fails to take legal actions against the director, any shareholder may take a derivative action on behalf of the company to seek compensation and other remedies from the director. However, if such derivative action is successful, compensation payable by the director would go to the company itself rather than to the shareholder who initiated the actions on behalf of the company. Other remedies are also for the benefit of the company rather than a particular shareholder.

Furthermore, in cases where the directors acted in accordance with a resolution of a general meeting, they would not be liable to the company or the shareholders who approved such actions. However, minority shareholders who did not approve such actions of the directors may still bring a claim against the directors, but they must do so within six months from the date of the general meeting.

Shareholder activism is still rare in Thailand, as minority shareholders have very limited means to cause any change to the company. Derivative actions could be used as a tool by any shareholders in this regard but, given that all benefits derived from such actions go to the company and not to the shareholder who initiated such actions, minority shareholders are not incentivised to initiate such actions in the first place. Hostile takeovers are another means available, but they require substantial capital and other resources, and do not work well with companies that have a small amount of free float shares, which is the case for many listed companies in Thailand.

Removal of an executive or director who engaged in some sort of personal scandal seems to be the most common cause for shareholder activism in Thailand. Environmental, sustainability and governance (ESG) issues are still in an early development stage in Thailand, but it is foreseeable that they could become an aim of shareholder activism in the future.

Strategies of shareholder activists vary from one activist to the next, and also depend largely on their goals. In the case of an attempt to remove a director or executive of a company, the most common strategy is to create a social media campaign or otherwise create media coverage regarding the issue in order to have it widely discussed by the general public to pressure the targeted individual to resign from their position or, if necessary, to pressure the board or shareholders of the company to forcefully remove the individual in question.

As far as is known, no specific industries or sectors are currently targeted by shareholder activists in particular. In the past, however, there were strong movements against the proposed listing of a major liquor and beer company in the SET, citing moral concerns and concerns over the proliferation of alcohol consumption in the country.

As far as is known, no particular groups or types of shareholders are more active in shareholder activism. Various securities companies introduced mutual funds that emphasise ESG in their investment strategies, but the impact of such mutual funds is yet to be seen.

There is no publicly available information on the proportion of public activist demands that were met over the past year.

Response strategies would largely depend on the circumstances. However, as most shareholder activism in Thailand seems to revolve around personal controversies of a director or executive, removing the controversial figure from the position, at least on a temporary basis, seems to be a practical step to calm activists.