Nominee Directors in Thailand:
Civil, Criminal and Tax Liability

1. Introduction

A common situation in the Thai business world is being asked by a friend, relative, or acquaintance to "just sign your name" as a company director. The person asked often believes this is merely "lending a name" with no real work and no risk involved.

This understanding is dangerously wrong. Under Thai law, company directors bear duties and liabilities from the date of their appointment, regardless of whether they are actually involved in management.

This article analyses the scope of legal liability of "nominee directors" in civil, criminal, and tax dimensions, providing information for business owners and the general public to appreciate the risks before accepting such positions.

2. Legal Framework: Duties of Company Directors

2.1 Duty of Care

"In conducting the business of the company, the directors must exercise the care of a prudent businessperson. In particular, the directors are jointly responsible for the following:
(1) That payment for shares has actually been made;
(2) That proper books of account and documents are made and maintained;
(3) That dividends and interest are distributed in accordance with the law;
(4) That the resolutions of general meetings are duly carried out." Civil and Commercial Code, Section 1168, paragraph 1

2.2 Appointment and Removal of Directors

"Only the general meeting may appoint or remove directors." Civil and Commercial Code, Section 1151

This means that even if a director wishes to resign, if the change is not registered with the Department of Business Development, the person's name remains in the register and they continue to bear legal duties.

2.3 Liability to Third Parties

"The relations between the directors and the company and third parties are governed by the provisions of this Code concerning agency." Civil and Commercial Code, Section 1167

Directors therefore have the status of agents of the company. If they act beyond their authority or cause damage to third parties, they may be personally liable.

3. Hypothetical Scenario and Analysis

3.1 Civil Liability

Issue	Legal Basis	Consequence
Failure to maintain books / file financial statements	CCC Section 1168(2)	Directors are jointly responsible
Unlawful dividend distribution	CCC Section 1168(3)	Directors must repay the company
Transactions beyond authority	CCC Section 1167 with Section 820	Directors are personally liable
Director causes damage to the company	CCC Section 1169	Shareholders may bring a derivative action

3.2 Criminal Liability

Beyond civil liability, directors may face criminal liability under several special statutes:

Statute	Offence	Penalty
Act Prescribing Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499, Section 42	Persons responsible for the company's operations committing offences	Penalties as prescribed for the specific offence
Accounting Act B.E. 2543, Sections 27 & 28	Failure to appoint an accountant / file financial statements	Fine up to 30,000 Baht + daily fine up to 1,000 Baht
Revenue Code, Section 37	Intentional tax evasion / failure to file returns	Fine up to 200,000 Baht or imprisonment up to 1 year, or both
Revenue Code, Section 90	Failure to file tax returns on time	Fine up to 2,000 Baht
Social Security Act B.E. 2533	Failure to register / remit contributions	Imprisonment up to 6 months or fine up to 20,000 Baht, or both

3.3 Tax Liability

The Revenue Department has the power to collect unpaid taxes from the company, and if the company fails to pay, the authorised signatory director may face criminal prosecution under the Revenue Code, in particular:

• Section 37: Intentional failure to file tax returns to evade tax — imprisonment up to 1 year or fine up to 200,000 Baht
• Section 37 bis: Making false statements or giving false testimony — imprisonment from 3 months to 7 years, fine from 2,000 to 200,000 Baht
• Surcharges and penalties: Failure to file on time incurs a surcharge of 1.5% per month

4. Is "Not Knowing" a Valid Defence?

The short answer is no, for the following reasons:

Common Excuse	Why the Law Rejects It
"I just signed my name, I didn't manage anything"	Section 1168 requires every director to exercise oversight — no exception for non-managing directors.
"I never signed any documents"	Section 1168(2) imposes "joint" responsibility for books and accounts — personal signing is not required.
"I received no remuneration"	The law does not make remuneration a condition of liability — holding the position equals bearing the duty.
"I didn't know the company had debts"	Section 1168(2) requires directors to "make and maintain" books of account — ignorance equals neglect of duty.

5. Differences Between Shareholders and Directors

Aspect	Shareholder	Director
Liability	Limited to unpaid share value (Section 1096)	Unlimited under Duty of Care (Section 1168)
Criminal liability	None (unless personally at fault)	Yes — under the Act Prescribing Offences, Revenue Code, etc.
Appointment/Removal	Shares may be bought and sold (Section 1129)	Only by resolution of the general meeting (Section 1151)
Oversight duty	No direct duty	Must exercise oversight at all times

6. Preventive Recommendations

6.1 For Those Asked to Become a Director

1. Refuse if you have no intention of actually participating in management — "No" is the safest answer.
2. If you must accept, execute a written agreement clearly defining the scope of authority and duties.
3. Pre-agree on resignation conditions, including a requirement for shareholders to appoint a replacement within a specified period.
4. Regularly verify the company's status, at least quarterly — review financial statements, tax filings, and social security compliance.
5. Keep copies of all documents you sign — certificates of incorporation, memoranda of association, articles of association.

6.2 For Those Already Serving as a Director Who Wish to Resign

1. Submit a written resignation letter to the company by registered mail with return receipt.
2. Notify the Department of Business Development to register the change of directors — if the company fails to do so, you may file the application yourself.
3. Keep evidence of your resignation through all channels (letter, email, LINE).
4. Verify your status through the Department of Business Development website (datawarehouse.dbd.go.th) to confirm your name has been removed.

7. Conclusion

A company directorship is not merely "a name on a document" but a position carrying full duties and liabilities under civil, criminal, and tax law. The law does not accept the excuses of "not knowing" or "not managing" because directors are obliged to oversee the company's affairs by the nature of their position.

References

1. Civil and Commercial Code, Section 1096 (Limited Company — Limited Liability of Shareholders)
2. Civil and Commercial Code, Section 1151 (Appointment and Removal of Directors)
3. Civil and Commercial Code, Section 1153 (Resignation of Directors)
4. Civil and Commercial Code, Section 1167 (Directors as Agents of the Company)
5. Civil and Commercial Code, Section 1168 (Duties and Joint Liability of Directors)
6. Civil and Commercial Code, Section 1169 (Derivative Action by Shareholders)
7. Act Prescribing Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499, Section 42
8. Accounting Act B.E. 2543, Sections 27 & 28
9. Revenue Code, Sections 37, 37 bis, 90
10. Social Security Act B.E. 2533

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Disclaimer: This article is prepared for academic and general educational purposes only and does not constitute legal advice for any specific individual or entity. The hypothetical scenarios used do not refer to any specific person or legal entity. Readers should consult a legal advisor before taking any action.