Shareholder Liability After Company Dissolution and Unpaid Obligations
Mr. Witaya sued Nemit Thai Co., Ltd. for the payment of 500,000 baht. The court ruled in favor of Nemit Thai Co., Ltd. to pay Mr. Witaya the sum of 500,000 baht. Nemit Thai Co., Ltd. was found to have no assets to pay the debt as determined by the court. Furthermore, Nemit Thai Co., Ltd. had been deregistered as a dissolved company by the Department of Business Registration, having published a notice in the Royal Gazette following the court’s final ruling. Although the court had ruled that Nemit Thai Co., Ltd. must pay the debt, an investigation revealed that Mr. Suchai and Mr. Chingchai, who were shareholders of Nemit Thai Co., Ltd., still owed unpaid shares in the company. Mr. Witaya notified the official receiver of the debt. The official receiver and the two individuals were instructed to bring the outstanding share value to the official receiver for payment. Mr. Suchai and Mr. Chingchai refused, claiming that only the company’s directors had the authority to demand payment of shares and that since the company had dissolved, there were no directors who could demand payment. They therefore refused to pay the share value.
It is advised to Mr. Witaya whether Mr. Witaya can sue Mr. Suchai and Mr. Chingchai to pay the outstanding shares as determined by the judgment of Nemit Thai Co., Ltd., and whether the two individuals’ refusal to bring the money to pay is justifiable.
Based on the Civil and Commercial Code Section 1246 (5), when the registrar removes a company’s name from the register by publishing a notice of dissolution, the company is considered dissolved from the date of publication in the Royal Gazette, and its liabilities remain as if the company were still in operation. The liability of shareholders of Nemit Thai Co., Ltd. who must pay the debt is not limited to the amount they still owe for the shares they hold, as long as the company’s name remains removed from the register. Nemit Thai Co., Ltd. can still sue Mr. Suchai and Mr. Chingchai to pay the outstanding share value, although the company had previously demanded payment of the debt that was owed to Mr. Witaya. This demonstrates that Nemit Thai Co., Ltd. disregarded Mr. Witaya’s rights as a creditor and exercised its rights in his name as a creditor to Nemit Thai Co., Ltd. This action resulted in Mr. Suchai and Mr. Chingchai being ordered to pay Mr. Witaya the outstanding share value as stipulated in the Civil and Commercial Code Section 233. Therefore, Mr. Witaya is advised to proceed based on the provisions of the law regarding the exercise of rights by creditors, as stated above.
The argument of Mr. Suchai and Mr. Chingchai that only the company’s directors had the authority to demand payment of shares and that since the company had dissolved, there were no directors who could demand payment is not applicable under Civil and Commercial Code Section 1120, because the company’s name had been removed from the register, indicating that it was a dissolved company. Nevertheless, the liability for outstanding share value remains and can be enforced as if the company were still in operation, as stipulated in the Civil and Commercial Code Section 1246 (5).