Fraud Among Business Partners / Internal Company Fraud: Should You File a Complaint? What Legal Actions Can Be Taken?

Doing business with others, whether in the form of a partnership or a limited company, always carries risks, particularly in financial transparency. Issues such as partners embezzling company funds, executives misappropriating assets, or individuals abusing their positions for personal gain can cause serious damage to a business.

Many people wonder: Should a complaint be filed when fraud occurs? What legal actions can be taken? This article will provide a legal guide on how to handle such situations.

Can You File a Complaint if a Partner or Company Executive Commits Fraud?

The answer is “Yes.” If there is evidence of embezzlement, fraud, or corruption within the organization, a criminal complaint can be filed with the police. Additionally, a civil lawsuit can be pursued to claim damages and recover stolen funds.

Filing a complaint has the advantage of pressuring the offender through legal means, which may lead to a settlement or return of funds before the case proceeds further. However, failing to report the fraud could allow the perpetrator to escape justice and continue causing financial harm.

What Criminal Offenses Apply to Internal Company Fraud?

When fraud occurs within a company, it may fall under several legal offenses, including:

1. Embezzlement (Section 352 of the Thai Criminal Code)

If a partner or company director is responsible for managing company assets but misuses the funds for personal gain without authorization, they may be charged with embezzlement, which carries a penalty of up to 3 years in prison or a fine of up to 60,000 baht, or both.

Examples:

• A partner responsible for the company’s finances withdraws money from the company’s account for personal use.
• A director transfers company funds to their personal account without a legitimate business reason.

2. Fraud (Section 341 of the Thai Criminal Code)

If an individual uses deception, false information, or fraudulent schemes to make a partner or company transfer funds improperly, it constitutes fraud, which carries a penalty of up to 3 years in prison or a fine of up to 60,000 baht, or both.

Examples:

• An executive forges accounting records to withdraw money from the company unlawfully.
• A partner persuades others to transfer investment funds under false pretenses but uses them for personal expenses instead.

If the fraud involves the general public, such as tricking outsiders into investing in a company with no genuine business intention, the penalty increases to up to 5 years in prison.

3. Document Forgery (Section 264 of the Thai Criminal Code)

If someone falsifies accounting records, receipts, or financial documents to withdraw company funds, they may be charged with document forgery, which carries a penalty of up to 3 years in prison or a fine of up to 60,000 baht, or both.

Examples:

• An executive signs company checks without authorization.
• Someone forges another director’s signature to transfer money from the company account.

4. Abuse of Position in a Company (Sections 307-315 of the Thai Criminal Code)

If a company director or an executive abuses their authority to commit fraud, it may fall under offenses related to misuse of official position:

• Section 307: An official (including company directors) misuses their power unlawfully.
• Section 308: An official misappropriates company funds under their management.

Examples:

• A company director knowingly allows fraudulent activities.
• An executive uses their position to gain illicit personal benefits.

What Should You Do If You Are a Victim of Internal Fraud?

If you suspect fraud within your company, take the following steps:

✅ 1. Gather Evidence – Collect accounting records, bank transactions, chat messages, contracts, and other relevant documents.

✅ 2. File a Complaint with the Police – Initiate criminal proceedings against the perpetrator.

✅ 3. File a Civil Lawsuit – Seek compensation and force the return of stolen funds.

✅ 4. Notify Relevant Authorities – If it’s a limited company, report the misconduct to the Department of Business Development (DBD) for investigation.

✅ 5. Consult a Lawyer – Take legal action effectively and ensure compliance with Thai laws.

Take Legal Action—Consult a Professional Lawyer

If fraud occurs within a company, legal action is crucial to prevent further financial losses and ensure justice. Various charges can be applied, such as embezzlement, fraud, document forgery, and abuse of position.

Thus, if you discover fraudulent activity within your company, do not ignore it—take legal steps to protect your rights and uphold corporate integrity.

For further legal advice, consult a professional lawyer to ensure proper legal action and prevent future business disputes.