Directors Competing With Their Company in Thailand: Section 1168 and Liability

Short answer: A director of a Thai limited company may not carry on a competing business of the same nature, or become an unlimited partner in a competing firm, without the consent of the shareholders’ general meeting. The Supreme Court treats a breach as a tort, with accomplices jointly liable.

See the overview in Business Partner Fraud in Thailand.

What Section 1168 prohibits

• Competing trade: any business of the same nature that competes with the company, for oneself or others.
• Unlimited partnership: becoming an unlimited partner in a competing firm.
• Exception: permitted with the consent of the general meeting.
• Scope: the rule also binds a director’s representative.

Thailand has no separate “corporate opportunity doctrine” statute identified in this research; analysis should start from Section 1168 itself.

Supreme Court Judgment No. 2359/2567 (2024)

The Court decided the following.

• The director: joining the board of a competitor while in office was a wilful breach of Section 1168 and a tort under Section 420.
• The competitor: jointly liable, because it acted with the director to compete.
• A co-founder who knew of the scheme: jointly liable as a joint tortfeasor, even though their appointment as the plaintiff’s director had not been registered.
• Compensation: governed by Section 438.
• Limit on relief: the Court would not order the competitor dissolved or its objects changed.

Who sues

The company, or a shareholder on its behalf if it refuses — see [suing a director as a shareholder]. In a partnership, other partners may claim profits or compensation within one year of the breach — see[ Partnership Disputes in Thailand].

FAQ

Can a former director compete after resigning? Section 1168 binds serving directors; post-resignation restrictions depend on any separate agreement.

Speak to a Thai Lawyer About Director Competition

Pattara Law Firm reviews evidence of competing activity, identifies jointly liable parties, sends warning letters and represents companies in Thai courts to recover damages. We do not guarantee outcomes.

• Telephone: +66 99 249 5989
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