There has been a general change in the Thai regulatory environment where regulations that had not been consistently enforced in the past are now starting to be enforced on a more regular basis. A good example of this change has occurred with respect to the penalties that apply to Thai limited companies and their directors for failing to hold their annual general meeting of shareholders (AGM) or file their annual financial statements within the prescribed time periods.
As discussed in more detail here , Thai private limited companies are required to hold an AGM each year within four months following the company’s fiscal year end. Within one month following the AGM, Thai limited companies are also required to file audited financial statements along with an updated list of shareholders (BOJ 5) with the Thai Ministry of Commerce (MOC).
The penalties for failing to file audited financials and an updated shareholder list on time are a maximum of Baht 50,000 imposed on the company and Baht 50,000 imposed on each of the responsible directors, depending on when the filings are eventually made and the type of company involved. In particular, according to the current regulations of the MOC's Department of Business Department (DBD), if the company files its financial statement within two months after the prescribed period, a fine of Baht 1,000 will be imposed on the company and each of the responsible directors. A fine of Baht 4,000 will be imposed if the company files its financial statements after two months but within four months after the prescribed period whereas a fine of Baht 6,000 will be imposed if the financial statements are filed after four months. Higher penalties apply to Thai private limited companies that are considered "alien companies" under Thailand's Foreign Business Act B.E. 2542.
As for failing to convene an AGM within the prescribed time, a maximum penalty of Baht 20,000 may be imposed on the company and Baht 50,000 on each of the responsible directors, although the current applicable rate announced by the DBD and effective as of 17 April 2012 is Baht 6,000 imposed on the company and each of the responsible directors (the DBD routinely adjusts the above penalties on an annual basis). This penalty is in addition to any applicable penalties described above in connection with late filings of audited financial statements.
Although the above penalties have been on the books for some time, in practice the MOC did not always enforce them against companies and their directors. This year, however, we have seen the MOC begin to enforce these penalties on a more regular basis. The take away point here is that the directors of a Thai limited company (as well as others doing business in Thailand) cannot assume that the authorities will not enforce Thai laws and regulations because they have not done so in the past.