Setting up a company is the very first stage to launch your business in Thailand. One of the very first milestone is to appoint director(s) of the new company.
A common strategy among the foreign-owned companies is to recruit a Thai as its director as it would become handy when it comes to the company’s operation in Thailand since the person is a native, based in Thailand and may understand business operation in Thailand very well.
Some companies make a mistake in giving too much or absolute authority to a hired director, especially when the person is the sole authorized director of the company. What happens if the sole director steals from the company and you as the major shareholder cannot even dismiss him? Dismissal of a director has to be done by a shareholders’ meeting and then registered with the Department of Business Development and every stage needs signatures of the sole director himself.
To dismiss the only director of a company without his cooperation, here are the steps:
1. Shareholder(s) holding not less than one-fifth of the shares of the company send a letter summoning for an extraordinary meeting of shareholders to the director;
2. The director must call for the extraordinary meeting of shareholders, but if he does not, then read step 3;
3. Once thirty days from the date the letter was delivered to the director has passed, and the proposed meeting has not been called during such period, shareholder(s) holding not less than one-fifth of the shares of the company can now call for an extraordinary meeting of the shareholders regardless of cooperation of the director.
4. The meeting shall include two essential agendas: 1) dismissal of the director and; 2) appointment of a new director. When the dismissal and appointment is approved by the meeting, the new director can register these resolutions passed by the meeting with the registrar.
Contact Thai Lawyers for your business needs in Thailand.