A Possibility to Amend Thai Corporate Law: Circular Resolutions of the Board of Directors
Keywords:
Circular resolution, Board of directors’ resolution, Corporate lawAbstract
Under Thai corporate law, boards of directors in private limited companies can pass resolutions only if meetings are constituted physically or through electronic means. However, the law prohibits the boards from making circular resolutions in lieu of formal meetings. This article explores the background of Thai law and comparative studies on the laws of Thailand, Germany, Switzerland, and the United Kingdom governing circular resolutions in the board of directors, with the purpose of analysing issues under Thai law and the possibility of amending related laws to uphold the intention of the law to form formal meetings. The article finds that Thai law restricts the boards from passing circular resolutions because it is considered to circumvent sections 1600, 1161, 1162, and 1163 of the Thai Civil and Commercial Code. However, the article finds that the interpretation of these sections is too narrow compared to the context of the sections, and this restriction does not align well with the current business practice. Furthermore, the company’s directors are bound to the fiduciary duties that are determined under the law. Therefore, the author takes the view that the law governing this issue should be amended by cancelling the Notification of the Department of Business Development Re: Registration of Limited Company Articles of Association Pursuant to the Civil and Commercial Code, dated 10 September B.E. 2551 (2008), to allow the board of directors to pass a circular resolution. In this regard, the author also views that the law should allow the company’s shareholders to determine and impose special conditions and restrictions on this approach in the company’s article of association.
References
Nilubol Lertnuwat, ‘The Missing Part in Law on Derivative Action: The Study of Private Company’ (2019) 1 Thammasat Law Journal 72 <https://so05.tci-thaijo.org/index.php/tulawjournal/article/view/165164> accessed on 1 July 2023.
Nilubol Lertnuwat, ‘The Missing Part in Law on Derivative Action: The Study of Private Company’ (Submitted to The Research Promotion Committee, Faculty of Law, Thammasat University 2019) 14.
Andreas Cahn and David C. Donald, Comparative Company Law (1st edn, Cambridge University Press 2010) 312.
CCC, s 66, CCC s 1144.
CCC, s 1012, Lertnuwat (n 2) 15.
Cahn and Donals (n 3) 332.
CCC, s 1169, 1168.
CCC, s 823, 1167.
The Stock and Exchange Commission of Thailand, ‘Director’s Handbook’ (Thai Institute of Directors) vol 1 <https://publish.sec.or.th/nrs/499ae8.pdf> accessed 12 May 2025.
Supreme Court of Thailand, Judgement No. 6281/2550, 1493/2540.
CCC, s 1108, 1164.
สหธน รัตนไพจิตร, กฎหมายลักษณะห้างหุ้นส่วนบริษัท (พิมพ์ครั้งที่ 7, สำนักพิมพ์วิญญูชน 2564) 405.
Department of Business Development (Thailand), Ruling No. PorNor 0803/163.
CCC, s 1168 para 2, 1172.
CCC, s 1162.
CCC, s 1160.
CCC, s 1161.
‘Thai Civil and Commercial Code Amendment: Introduction of Merger Scheme and Flexibility for Corporate Governance of Limited Companies’ (Kudun & Partners, 2022)
Legal Alert l Corporate M&A <https://www.kap.co.th/wp-content/uploads/2022/10/2022-10-Legal-Alert-Thai-Civil-and-Commercial-Code-Amendment.pdf> accessed on 6 May 2025.
The Notification
William Ewald, ‘Comparative Jurisprudence (II): The Logic of Legal Transplants’ (1995) 43(4) The American Journal of Comparative Law <http://www.jstor.org/stable/840604> accessed on 25 September 2023.
Governance Institute of Australia, Board Papers (2021) 8 <https://governanceinstitute.com.au/app/uploads/2023/11/govinst_guidance-board_papers_2021.pdf> accessed on 6 May 2025.
สมยศ เชื้อไทย, ความรู้กฎหมายทั่วไป (พิมพ์ครั้งที่ 27, สำนักพิมพ์วิญญูชน 2563) 24.
The Law Library of Congress, ‘Thailand: Constitution and Legal System’ (1996) 3 <https://tile.loc.gov/storage-services/service/ll/llglrd/2019668458/2019668458.pdf?utm_source=chatgpt.com> accessed on May 10, 2025.
Dr. Thomas Rinne, A guide to corporate forms for doing business in Germany (Buse Heberer Fromm Rechtsanwälte, 2017) <https://buse.de/wp-content/uploads/2019/05/Corporate-Forms-in-Germany-2017.pdf> accessed on May 10, 2025.
GmbHG, s 11.
Rinne (n 23) 11.
Doing Business in Germany (Hogan Lovells 2014) 3
<https://www.hoganlovells.com/~/media/germany_folder-for-german-team/broschueren/brochure_doing_business_in_germany.pdf> accessed on 10 May 2025.
GmbHG, s 43(1).
GmbHG, s 43(2).
Hogan Lovells, ‘Doing Business in Germany’ (2014) <https://www.hoganlovells.com/~/media/germany_folder-for-german-team/broschueren/brochure_doing_business_in_germany.pdf> accessed on May 10, 2025
GmbHG, s 37(1), 54.
Dr. Wolfgang Grobecker & Dr. Andreas Junius & Stefan Thilo, Germany (European lawyer reference series) <https://www.pplaw.com/sites/default/files/2020-07/wg-aj-companies-director-overview-germany.pdf> accessed on 11 May 2025.
Julian Velasco, ‘Shareholder Ownership and Primacy’ (2010) (University of Illinois Law Review) 908 accessed on May 11, 2025.
‘Chapter III - Forms of business enterprises’ (IBFD) 21 <http://ibfd.org/sites/default/files/2021-12/MAS_sample.pdf> accessed on May 11, 2025.
CO, Art 716(2), 717, 718(1).
CO, Art 716(1).
Urs Kägi and Vera Naegeli, ‘Corporate Governance 2022 - Switzerland’ (Baer & Karrer, 2022) <https://www.mondaq.com/shareholders/1257486/corporate-governance-2022---switzerland#:~:text=Urs%20K%C3%A4gi%20and%20Vera%20Naegeli> accessed on 2 July 2023.
CO, Art 713 para 1, 713 para 2.
Lorea Mendiguren, 'Knowing and Navigating Decision Rules' (Harvard Negotiation & Mediation Clinical Program Blog, 2022)
<https://hnmcp.law.harvard.edu/hnmcp/blog/knowing-and-navigating-decision-rules/> accessed 16 May 2025
CO, Art 713 para 2.
Dr. Luca Jagmetti, Susanne Schreiber, and Raphael Annasohn, Swiss Corporate Law Reform 1.1.2023 – Practical Impacts for Non-listed Companies (September 2022) <https://media.baerkarrer.ch/karmarun/image/upload/baer-karrer/jqaq3qd5yjq082noulmd.pdf> accessed on 20 October 2023.
Benedict F. Christ & Carina Frohli, ‘New Company Law: Circular Resolutions of the Board of Directors (No. 19)’ (VISCHER, 2022) <https://www.vischer.com/en/knowledge/blog/new-company-law-circular-resolutions-of-the-board-of-directors-no-19-39795/#page=1> accessed on 20 June 2023.
CO, Art 713 para 2(3); Lenz & Staehelin David Ledermann & Andreas Rötheli, Switzerland (European Lawyer Reference Series) 374 <https://www.lenzstaehelin.com/fileadmin/user_upload/publications/Switzerland_v_1.pdf> accessed on 20 October 2023.
Department for Business, Innovation and Skills, A Guide to Legal Forms for Business (BIS/11/1399, 2011) 4 <https://assets.publishing.service.gov.uk/media/5a7988d140f0b63d72fc698a/11-1399-guide-legal-forms-for-business.pdf> accessed 13 May 2025.
CCC, s 1096;
Cahn and Donals (n 3) 303.
The United Kingdom Companies Act 2006, Art. 190.
The United Kingdom Companies Act 2006, Art. 197.
Cahn and Donals (n 3) 315.
Lesile Kosmin, Company meetings and resolutions: law, practice and procedure (2nd edn, Oxford University Press 2013) 313.
The United Kingdom Companies Act 2006, Art. 20; Bethany Roser, Kath Saunders, and Lauren Melnyk, ‘ARTICLES OF ASSOCIATION - TIME FOR AN UPGRADE?’ (Stevens & Bolton, 2020) 1 <https://www.stevens-bolton.com/cms/document/articles-of-association.pdf> accessed on 15 May 2025.
Jonathan Hardman ‘Articles of Association in UK Private Companies: An Empirical Leximetric Study’ (2021) 22 (European Business Organization Law Review) 542-547 <https://link.springer.com/article/10.1007/s40804-021-00213-3> accessed on 15 May 2025.
‘Directors’ Duties in the United Kingdom: Board Management Structure – Decisions Made by Directors’ (DLA Piper, 2024) <https://www.dlapiperintelligence.com/directorsduties/countries/index.html?t=board-management-structure&s=02-decisions-made-by-directors> accessed 15 May 2025.
Lesile Kosmin & Catherine Roberts, Company meetings and resolutions: law, practice and procedure (3rd edn, Oxford University Press 2020) 381
Ibid 350.
The United Kingdom Companies Act 2006, Art. 20; Sarah Worthington, Text, Cases, & Materials in Company Law (11th edn, Oxford University Press 2016) 300
Kosmin and Roberts (n 59) 349.
Mendiguren (n 39).
Aaron Hall, 'Circular Resolution Approvl Clause' (Aaron Hall, 2024) <https://aaronhall.com/circular-resolution-approval-clause/> accessed 17 May 2025.
The 2006 Model Article, Art. 8(4).
The United Kingdom Companies Act 2006, s 248
The 2006 Model Article, Art. 15; Kosmin and Roberts (n 59) 350.
Governance Institute of Australia (n 20).
The Notification
Christ and Frohli (n 44).
Social Business Wales, ‘Guide to Board members’ meetings for social businesses that are limited companies’ (Business Wales, October 2022) 7 <https://businesswales.gov.wales/socialbusinesswales/sites/socialbusinesswales/files/documents/board-members-meetings.pdf> accessed 13 May 2025.
Governance Institute of Australia (n 20); ‘Conducting a Board Meeting in Ireland’ (KPMG Law Ireland, 2023) 4 <https://kpmglaw.ie/pdf/ie-conducting-board-meeting-in-ireland.pdf> accessed 16 May 2025.
Carter Newell, ‘Circular resolutions of the Board – the pros and cons’ (Lexology, 2015) <https://www.lexology.com/library/detail.aspx?g=e19fd1fa-f852-41a7-b1fe-c236e5a12e8f> accessed 13 May 2025.
Christ and Frohli (n 44).
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Thammasat Law Journal
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
The manuscripts published in the Law Journal is the copyright of the Law Journal, Thammasat University
Any article or opinion appeared in the Law Journal will solely be under the responsibility of the author The Faculty of Law, Thammasat University and the editors do not need to reach in agreement or hold any responsibility.
