Never Received Share Certificates from Your Accounting Firm? It’s More Dangerous Than You Think — Directors Could Face Jail Time Without Knowing It

In a private limited company, “shares” represent ownership. For companies with multiple shareholders, issuing share certificates isn’t just a business formality — it’s a legal obligation. Failure to do so can lead to serious civil and criminal consequences, especially for company directors who may be held responsible on behalf of the company and other shareholders.

A Common Problem Among SMEs in Thailand

Many Thai SMEs and small businesses rely on accounting firms to handle everything — from registration to tax filing. However, the business owners or directors often have no idea that essential documents like share certificates or shareholder registers were never prepared. This means there may be no evidence of who truly owns the company.

While it may not seem serious at first, problems can arise later — such as partner disputes, profit disagreements, or issues during loan applications, share transfers, or capital increases. The absence of proper share documentation can become a legal and financial disaster.

What Are Shares and Why Are Share Certificates Important?

• Shares represent ownership in a private company. The more shares you own, the more influence you have over company decisions and profit distributions.
• Share certificates are official documents that prove shareholder ownership. Thai law requires directors to issue these within a specific time frame.

Who Suffers When There Are No Share Certificates?

1.Shareholders
Without certificates, shareholders lack legal proof of ownership. In case of disputes, they might lose rights to dividends or company control.

2.Company Directors
Under Sections 1129 and 1134 of Thailand’s Civil and Commercial Code, directors must properly issue share certificates and maintain the shareholder register. Neglecting this could be considered “malfeasance” and lead to personal liability or even criminal charges.

3.The Company
Without a valid shareholder register or certificates, important transactions like capital increases, share pledging, or business sales may face legal complications.

Why Don’t Accounting Firms Issue Share Certificates?

Many business owners wrongly assume that hiring an accounting firm means everything is covered. In reality, issuing share certificates is a director’s responsibility, not the accountant’s. Since tax authorities don’t usually ask for these documents, many firms either neglect to prepare them or fail to inform clients they are required.

This problem is even more common with companies registered online or in a rush — often, only the registration and tax ID are done, while share documentation is completely overlooked.

How Do You Know If You Have a Share Certificate?

Check immediately:

• Do you have a share certificate with your name, number of shares, and the director’s signature?
• Does the company have an official shareholder register?
• Are shareholder meetings and resolutions held in compliance with the law?

If you’re unsure, consult a business lawyer right away.

What To Do If You’ve Never Issued Share Certificates?

1.Gather Company Info
Check registration documents, director names, and shareholder details via Thailand’s Department of Business Development (DBD).

2.Create a Shareholder Register
This legally required document must list all shareholders, their share counts, and the date of receipt.

3.Issue Backdated Share Certificates
Prepare legally correct certificates with signatures and company seals, clearly marking the issue date.

4.Hold a Meeting to Approve Retroactive Documents
If no resolutions have ever been passed, conduct an official meeting and record the minutes.

5.Consult a Lawyer
Ensure all retroactive documents comply with the law and can be used in future disputes or transactions.

Shares Are Not Just Paper — They Represent Ownership and Legal Liability

Don’t let your shares exist without legal proof. No share certificate = no ownership evidence. And if you’re a director who never issued share certificates, you could go to jail without realizing it.

If you’re unsure whether your share documents are valid:
👉 Consult a lawyer specializing in corporate documentation for your safety and peace of mind.