My friend owns 49% shares in a Company in Thailand and her Thai partner owns 51%. Recently she discovered her Thai partner is going to take over the entire company. What can she do now?

Any advice?

Get her to go see a lawyer and ask for a review of her company set up and advice on what she can/cannot do.- Preferably not the same lawyer she used to set the company up.

She might also have a word with General Sonthi. He knows a great deal about this sort of thing.

Get her to go see a lawyer and ask for a review of her company set up and advice on what she can/cannot do.- Preferably not the same lawyer she used to set the company up.

Agreed 100%. All depends on the paperwork on how the company was set up. No matter what she can't take over his shares unless he never paid for them.

www.sunbeltasiagroup.com

With 51% doesn't he own the company anyway?

I agree with Sunbelt. It does depend on how the company was set up. Hopefully, she has documented proof that it was her money that financed the company in the first place.

Depends on the setup of the company.

Whoever controls the board of directors "generally" controls what happens to the company within reason.

That said shareholders with 25% or more may have the right to veto any and all board decision.

Best to get all the company documents and speak to a lawyer.

With so little information given by the OP it's very hard to advise on what steps are either practical or legal (though not necessarily both...)

Is the 49% shareholder a Director of the company? Does she have signing authority on corporate documents, and very importantly, the bank accounts? Does she have an ATM card drawing on the company accounts?

Does she live in Thailand? Does she access to the moveable non-cash assets of the company?

Most importantly, would she prefer to lose 100% of her investment and remain in Thailand, or retain most of her investment and live elsewhere?

It might be practical for her to rent off-site storage in the company name (not her personal residence or other property she privately controls) and begin moving valuable company assets to that location. The rental contract and the keys should then "go missing" for the time being.

If she has access to company funds she might want to consider tapping them to buy investment grade gold and store this in a safe deposit box again rented in the company name.

If she's an employee of the company as well as a shareholder she might wish to authorize for herself a large advance on her salary.

In all cases she should cover herself by laying out a trail of memos addressed to the other partner and dated appropriately. Something to the effect of "per our meeting on such-and-such date, I've taken the following steps as we jointly agreed".

The goal is to lay false trail if the activities are later called into question, justify her actions or at least turn it into a he-said/she-said situation, and by doing it all under the company name she may more easily allay or refute suspicions of theft.

(And if she's got the authority to do so, she might want to start cancelling company-paid services from which the Thai partner draws benefit such as the lease on his car or apartment, if applicable.)

Make no mistake, if the Thai partner really is preparing to do this, then their personal and working relationship is at an end. The proper response is that she strikes first in her own defense, but couches all her activities in terms of meeting company objectives for which she alone creates documentation.

Once the Thai partner sees that he has a choice of owning 100% of nothing (except the taxes and other liabilities) or coming to a reasonable accomodation in wrapping up the company or buying out her interest at a fair price, the matter can be settled favorably.

It's all well and good to talk of consulting attorneys and this should be done so she has a refresher on the finer points of her partnership agreement. But most likely she's involved in the standard sort of deal where the junior partner has no power or recourse, especially if a foreigner.

Get her to go see a lawyer and ask for a review of her company set up and advice on what she can/cannot do.- Preferably not the same lawyer she used to set the company up.

Agreed 100%. All depends on the paperwork on how the company was set up. No matter what she can't take over his shares unless he never paid for them.

www.sunbeltasiagroup.com

"No matter what she can't take over his shares unless he never paid for them."<-----Please elaborate? Thanks...

With so little information given by the OP it's very hard to advise on what steps are either practical or legal (though not necessarily both...)

Is the 49% shareholder a Director of the company? Does she have signing authority on corporate documents, and very importantly, the bank accounts? Does she have an ATM card drawing on the company accounts?

Does she live in Thailand? Does she access to the moveable non-cash assets of the company?

Most importantly, would she prefer to lose 100% of her investment and remain in Thailand, or retain most of her investment and live elsewhere?

It might be practical for her to rent off-site storage in the company name (not her personal residence or other property she privately controls) and begin moving valuable company assets to that location. The rental contract and the keys should then "go missing" for the time being.

If she has access to company funds she might want to consider tapping them to buy investment grade gold and store this in a safe deposit box again rented in the company name.

If she's an employee of the company as well as a shareholder she might wish to authorize for herself a large advance on her salary.

In all cases she should cover herself by laying out a trail of memos addressed to the other partner and dated appropriately. Something to the effect of "per our meeting on such-and-such date, I've taken the following steps as we jointly agreed".

The goal is to lay false trail if the activities are later called into question, justify her actions or at least turn it into a he-said/she-said situation, and by doing it all under the company name she may more easily allay or refute suspicions of theft.

(And if she's got the authority to do so, she might want to start cancelling company-paid services from which the Thai partner draws benefit such as the lease on his car or apartment, if applicable.)

Make no mistake, if the Thai partner really is preparing to do this, then their personal and working relationship is at an end. The proper response is that she strikes first in her own defense, but couches all her activities in terms of meeting company objectives for which she alone creates documentation.

Once the Thai partner sees that he has a choice of owning 100% of nothing (except the taxes and other liabilities) or coming to a reasonable accomodation in wrapping up the company or buying out her interest at a fair price, the matter can be settled favorably.

It's all well and good to talk of consulting attorneys and this should be done so she has a refresher on the finer points of her partnership agreement. But most likely she's involved in the standard sort of deal where the junior partner has no power or recourse, especially if a foreigner.

Excellent advice. Worth a medal.

Excellent advice. Worth a medal.

Thanks. We actually expected some volume of criticism for this post.

But we are frequently approached to do asset recoveries for cheated business partners and as a rule it's far too late once the controlling partner has made his move. After-the-fact, the only thing we can do as a rule is to advise getting a lawyer, and quite often the senior partner's moves are entirely legal, and if not, the legal fees would exceed the value the junior partner is seeking to recover.

Agree with Moonfruit. Learnt a lot here.

Thanks, Thai-Spy!

To my understanding there is a minority protection law which comes into effect after a certain % ( I think >30% ).

As such, they might be able to bluff, but when push comes to shove, they will have to comply with the law.

My friend owns 49% shares in a Company in Thailand and her Thai partner owns 51%. Recently she discovered her Thai partner is going to take over the entire company. What can she do now?

Any advice?

Too little information.

To sweepingly take over a company (have control on all decisions), one needs at least 75% of the votes.

Repeat: 75% of the votes, not the shares.

Therefore, if a shareholder does not have 75% vote, he cannot take over the company. This is because the other 25.01% vote can block vote to increase capital. However, if your friend, or appointed agent, does not attend the shareholders meeting on capital increase agenda and vote against it, it is very likely that the other party can take over the company.