Call us now:
Minority shareholders’ protection in Thailand
Thailand’s business environment continues to evolve and create significant opportunities for both domestic and international investors. At the same time, minority shareholders in Thai companies must navigate legal and structural challenges when they seek to protect their rights.
Minority shareholders play a crucial role in strengthening transparency, corporate governance, and fairness within Thai companies. Through active participation and oversight, they contribute to accountability and long-term stability in the corporate sector. However, several factors can place them in a vulnerable position, including limited access to information, conflicts of interest with majority shareholders or directors, and practical obstacles when they attempt to pursue legal remedies.
At Benoit & Partners, we protect minority shareholders in Thai companies through strategic legal action and governance oversight. We enforce statutory rights, secure access to corporate information, challenge abusive resolutions, and initiate court proceedings when necessary. Our team structures shareholder agreements, prevents conflicts of interest, and strengthens corporate transparency to safeguard minority interests and long-term investment value.
Table of Contents
Get expert legal guidance.
Who is considered a minority shareholder?
In Thailand, minority shareholders include individuals or legal entities that hold less than half of a company’s shares. These investors may acquire their shares through private placements or public offerings. Unlike majority shareholders, who control more than half of the company’s capital and voting power, minority shareholders exercise more limited influence over corporate decisions.
However, minority shareholders can strengthen their position by forming groups or alliances. By coordinating their voting rights and strategies, they can influence management decisions more effectively and defend their collective interests within the company.
What rights do minority shareholders have in Thailand ?
In Thailand, minority shareholders are protected by various legal rights to guarantee their interests in companies. The main rights of minority shareholders in Thailand are as follows:
Right to information:
Minority shareholders in Thailand can access key financial and operational information, including financial statements, annual reports, and minutes of shareholders’ meetings. This access enables them to make informed investment decisions and monitor the company’s performance.Voting rights:
Minority shareholders can attend and vote at Annual General Meetings. Their votes carry the same weight as those of majority shareholders, typically one vote per share, unless the company’s articles of association provide otherwise.Right to fair representation:
Minority shareholders can seek fair representation within corporate governance structures, including the Board of Directors, so that management considers their views in major company decisions.Right to dividends:
Minority shareholders receive dividends in proportion to the number of shares they hold, provided that the Annual General Meeting approves the dividend distribution.Right to protection against abuse:
Thai law protects minority shareholders from actions by directors or majority shareholders that unfairly prejudice their interests or constitute abuse of power.Right to request an external audit:
Minority shareholders can request an independent external audit to verify the transparency and accuracy of the company’s financial transactions and operations, subject to the legal thresholds and procedures set by Thai law.
Get expert legal guidance.
What powers do minority shareholders have within the company ?
Participation in shareholders’ meetings:
Governed by Thai law, it stipulates that, with the exception of members of the Board of Directors, only shareholders representing at least one-fifth of the company’s total voting rights can call a meeting and set the agenda. However, the Thai law also offers protections to minority shareholders in Thailand, allowing them to participate in the general meeting in three distinct ways:
Adequate information (convening notice):
The company must send shareholders a formal notice that specifies the date, time, location, and agenda of the meeting so they can prepare properly. Thai law requires the company to deliver this notice at least seven days before the meeting, or 14 days in the case of special resolutions. The company must also publish the meeting details in a local newspaper, although lawmakers plan to remove this publication requirement. If the company fails to follow these rules, shareholders can challenge and potentially invalidate the resolutions adopted at the meeting.
Proxy voting:
Thai law allows shareholders to appoint a proxy to attend and vote on their behalf if they cannot attend the meeting in person. This mechanism ensures that shareholders can still exercise their voting rights.
Proposing an agenda:
Shareholders have the right to propose agenda items for consideration at a meeting. Although management usually prepares the agenda, Thai law permits shareholders to submit proposed topics, provided they satisfy the applicable legal requirements and thresholds.
Decision-making rules:
Depending on the number of voting rights held, the shareholder’s influence on the resolutions of other shareholders will vary:
- Holding more than 75% of voting rights : total control, with the power to impose all decisions at Annual General Meetings, thanks to its ability to adopt ordinary and special resolutions (capital increase, liquidation, dissolution, etc.).
- Holders of more than 50%, but less than 75% : Ability to pass ordinary resolutions alone, but the agreement of others is required for special resolutions;
- Holders of more than 25%, but less than 50% : Right to call an Extraordinary General Meeting and power to block special resolutions;
- Holders of between 20% and 25% : Right to call an Extraordinary General Meeting, but no real power to influence decisions;
- Holders of less than 20% : Inability to convene a General Meeting on their own, and no influence on the vote on ordinary or special resolutions.
Conclusion
The protection of minority shareholders in Thailand is of paramount importance in the business legal landscape. However, navigating this area requires a thorough understanding of the laws and mechanisms of corporate governance, which may seem complex at times. Therefore, it’s advisable for both in Thailand and the companies embracing them to seek guidance from a corporate lawyer at our firm.
If you need further information, you may schedule an appointment with one of our lawyers.
A minority shareholder holds less than 50% of a company’s shares and voting rights under the Thai Civil and Commercial Code.
Yes. They can attend and vote at shareholders’ meetings, usually on a one-share-one-vote basis.
Yes. They can review financial statements, annual reports, and minutes of shareholders’ meetings to monitor company performance.
Shareholders holding at least 20% of the voting rights can request the Board to convene an Extraordinary General Meeting, subject to legal requirements.
Yes. Thai law protects them from unfair actions by directors or majority shareholders and allows them to challenge unlawful resolutions.
Yes. They receive dividends in proportion to their shares when the shareholders’ meeting approves distribution.