Most directors of a Thai private limited company can say where the company seal is kept. Far fewer can say where the shareholder register is, or whether anything has been written in it since the company was formed. It is an easy document to overlook. It is also one of the few company records that Thai law treats as evidence of who actually owns the business.
This article sets out what the register is, what the Civil and Commercial Code requires, what tends to go wrong, and how to bring a neglected register back into order.
What the shareholder register is
Section 1138 of the Civil and Commercial Code requires every limited company to keep a register of its shareholders. This is the company’s own book, kept by the company, and it is separate from anything filed with the Department of Business Development. The filed list is a snapshot sent once a year. The register is meant to be the living record.
Section 1138 sets out five things the register must contain:
- the name, address and occupation (if any) of each shareholder, the shares held by each with the numbers of those shares, and the amount paid or agreed to be considered as paid on them
- the date on which each person was entered in the register as a shareholder
- the date on which any person ceased to be a shareholder
- the number and date of each certificate issued for share warrants to bearer, and the numbers of the shares included in each certificate
- the date of cancellation of any share certificate or share warrant to bearer
Where it is kept, and who may look at it
Under section 1139 paragraph one the register must be kept at the company’s registered office from the day the company is registered. Shareholders may inspect it free of charge during business hours. Directors may impose reasonable restrictions on when and how, but inspection must be available for no less than two hours a day.
A shareholder may also require the company to deliver a copy of the register, or of any part of it, under section 1140. The company may charge for the copy, but no more than five baht per page. Older English translations of the Code still quote a fee of fifty satang per hundred words; that figure is out of date, and the five-baht-per-page limit is the one that applies.
Why it carries legal weight
Section 1141 is the provision that gives the register its force. The register is presumed to be correct evidence of any matters that the law directs or authorises to be entered in it.
In practical terms, if there is ever a disagreement about who owns which shares, the register is where the question starts. Whoever says the register is wrong carries the burden of showing it. That presumption protects a shareholder whose entry is accurate. It works just as firmly against a buyer whose transfer was agreed, paid for, and never written down.
The annual filing, and why it is not the same thing
Section 1139 paragraph two requires the directors to send the registrar a copy of the list of all persons who are shareholders at the time of the ordinary general meeting, together with those who have ceased to be shareholders since the last ordinary general meeting, at least once a year and no later than the fourteenth day after that meeting. The list must carry the same particulars as the register itself. In practice this is the BorOrJor.5 (บอจ.5) filed with the Department of Business Development.
Two documents, two duties. Filing the annual list does not satisfy the duty to keep the register, and keeping the register does not satisfy the duty to file. A company can be fully up to date with the DBD and still be in breach at its own registered office, which is a surprisingly common position.
What usually goes wrong
- Shares are transferred by private agreement between the parties and the transfer is never entered in the register.
- The register is drawn up at incorporation and never touched again, so it still shows the founding shareholders years later.
- The annual list is prepared each year by copying last year’s figures, which quietly carries an old error forward indefinitely.
- The register sits with a former accountant or corporate service provider and is never handed over when the company changes advisers.
- The company moves office and the register, which must be held at the registered address, does not move with it.
None of these look urgent on the day. They surface later, usually at the worst moment: during due diligence on a sale, when a bank or a licensing authority asks for proof of ownership, when a shareholder dies and an estate has to be settled, or when a disagreement between partners turns formal.
The penalties
The fines sit in the Act Prescribing Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499, not in the Civil and Commercial Code itself. All the figures below are maximums:
- Section 10 — a company that does not keep a register of shareholders as required by section 1138 is liable to a fine not exceeding 20,000 baht.
- Section 11 — a company that does not keep the register, or does not open it to inspection by shareholders, as required by section 1139 paragraph one, is liable to a fine not exceeding 20,000 baht.
- Section 25 — for those two offences the directors, or whoever is responsible for the operation of the company, are liable to a further fine not exceeding 50,000 baht. This sits on top of the fine on the company.
- Section 26 — a director who fails to send the registrar the annual list of shareholders required by section 1139 paragraph two is liable to a fine not exceeding 10,000 baht.
Note that the exposure is personal as well as corporate. Even so, the fines are rarely the real cost. That is usually the transaction which stalls because ownership cannot be evidenced, or the position a shareholder finds themselves in when the paperwork does not support what everyone believed to be true.
Bringing a neglected register back into order
A register that has fallen behind can almost always be reconstructed. The work is methodical rather than difficult:
- Locate the existing register, or establish that none exists. Ask the incorporating firm or the previous accountant before concluding it was never made.
- Collect every share transfer instrument, subscription record and payment record since incorporation.
- Rebuild the ownership history in order, so that each entry has a date and a document behind it.
- Compare the result against the BorOrJor.5 filings lodged with the DBD. Where they diverge, work out which is right before deciding what to correct.
- Write up the register properly, keep it at the registered office, and give one person clear responsibility for updating it whenever shares change hands.
- Set a recurring reminder for the annual general meeting and the fourteen-day filing deadline that follows it.
A note for smaller and foreign-owned companies
Since 7 February 2023 a Thai private limited company can be formed with two shareholders rather than three. A smaller shareholder base makes the register more consequential, not less: with fewer holders, each entry carries more of the company, and a single unrecorded transfer can change control.
For companies with foreign shareholders, the register and the evidence of payment for shares are among the first documents examined in any review of the ownership structure. Keeping the register accurate, and consistent with what has been filed and what was actually paid, is simply good housekeeping.
This article is general information about Thai company law and is not legal advice. The Thai text of the Civil and Commercial Code is the authoritative version. The position in any particular company depends on its own documents and history, so please take advice on your specific circumstances before acting.
