If the only authorised signatory director becomes seriously ill, can the company still make contracts and withdraw money?

If the articles and the company affidavit make that director the sole authorised signatory, no one else has authority to bind the company by themselves, and a bank will usually follow the authorised-signatory form it has on file. You should therefore arrange a second authorised director and a power of attorney in advance.

What is the difference between a guardian and a curator?

A guardian is the representative of a person whom the court has ordered to be an incompetent person, under section 28. A curator assists a person whom the court has ordered to be a quasi-incompetent person, under section 32, and some acts then require the curator's consent. Both need a court order and the process takes time, so do not wait until something happens before you start preparing.

Can the other shareholders or the family appoint a new director in their place?

Only by following the articles and company law. Generally this needs a resolution of a shareholders' or directors' meeting as the articles provide, and the change must be registered with the Department of Business Development, depending on the majority and the number of shareholders. If the major shareholder is the person who cannot act, first check who has the right to vote in that shareholder's place.

What should we prepare before anything happens?

At a minimum, a second authorised director, an attorney with a clearly limited scope, bank account permissions that are set up properly, a register of passwords and digital accounts kept securely, a list of essential contacts, and complete company documents, such as the articles, the company affidavit, the shareholder register and meeting minutes.

If the Business Owner Is Suddenly Seriously Ill, Injured or Detained: What the Company Should Have Prepared

Q: Is an existing power of attorney still valid if the person who gave it loses capacity?

Under Civil and Commercial Code section 826, second paragraph, an agency ends when the principal or the agent dies, becomes an incompetent person or is made bankrupt, unless the contract or the nature of the business indicates otherwise. So you should not assume that a power of attorney will always continue to work. Have a lawyer check its wording and the nature of the work delegated.

In many family businesses and SMEs, one person is the owner, the authorised signatory director, the holder of the bank passwords, and the one who knows how each customer must be handled. If that person becomes seriously ill, has an accident, is detained, or cannot be reached for longer than intended, the company can come to a halt in a single day. It cannot sign, cannot pay salaries, cannot answer customers, even though the business still has work and income.

This guide deals with the situation where the owner is "alive but unable to work", which differs from death (see when a sole director dies, how the company carries on). The problem is that the law has no shortcut. Having someone else sign without authority does not make the matter valid, and whether a bank will bend its rules is the bank's own decision.

The core answer

A company that has prepared gets through this by opening a file made in advance. A company that has not prepared has to fix many things at once, under pressure from the family and contract deadlines. What to prepare: at least two authorised signatories, a power of attorney with a clearly written scope, bank account arrangements that match, a securely kept register of passwords and system access, and advance knowledge of the court steps needed if the condition is prolonged.

The rule (Thai law). An agency ends when the principal or the agent dies, becomes an incompetent person or is made bankrupt, unless the contract or the nature of the business indicates otherwise (Civil and Commercial Code section 826, second paragraph). A guardian is the representative of an incompetent person ordered by the court (section 28). A curator assists a quasi-incompetent person ordered by the court (section 32), and an act of a quasi-incompetent person that needed the curator's consent but was done without it may be voidable (section 34). A director's power to act for the company follows the company affidavit and the articles (sections 1144 and 1168).

Our practical view. What brings a business to a stop is usually not complicated law but a single missing document: the second director, the authorised-signatory form at the bank, or a password that exists in only one head. Start with these three, then deal with the more complex matters.

1. Where do problems arise when the only authorised person cannot act?

Cannot sign. Contracts, quotations that must bind the company, and official documents that must be signed by an authorised person.
Cannot spend money. The company's bank account is tied to the authorised persons notified to the bank. Others, even a spouse or child, have no automatic right.
Cannot log in. Email accounts, the accounting system, the online tax system, shop back-ends and online banking.
Cannot hold meetings. If the major shareholder is the person who cannot act, a shareholders' meeting may lack a quorum or a resolution may fail.
Tax and deadlines slip. No one is responsible for tax filings, salaries and contributions.
Customer confidence. Business partners and employees do not know whom to contact.

2. Separate the cases: temporary inability versus legal incapacity

Situation	Effect on the company	What to consider
Short-term illness or recovery, but still able to decide	The director's authority remains	Use the prepared power of attorney, or another director
Cannot be reached, for example surgery, intensive care, or abroad in an emergency	Authority remains but cannot actually be used	Powers of attorney made earlier; the bank may require more documents
Detained or imprisoned	In principle still a director, but cannot actually sign	Consider the articles, powers of attorney and appointing a new director
Loss of decision-making capacity, for example dementia or a severe condition	Depends on whether the court has made an order	A power of attorney may end under section 826, second paragraph
Court orders the person to be an incompetent person	A guardian is the representative (section 28)	The guardian must act as the law requires
Court orders the person to be a quasi-incompetent person	A curator gives consent (section 32)	Some acts need consent

Some situations are grey areas. Where there is no court order but the person in fact cannot decide, matters are hardest. Both the person who signs the document and the person who receives it run the risk that it will be challenged later. Consult a lawyer before signing anything important.

3. A power of attorney: how far it helps and when it ends

A power of attorney is the simplest tool when the principal is temporarily unable to act, but there are limits you must know.

The scope must be written clearly. State the matter, the contracts, the accounts and the period. A power that is too broad risks being misused, and many banks will not accept one that is not specific.
An agent has no authority beyond what is delegated. If the attorney acts beyond the scope, the company is not bound unless it ratifies the act or the case is one of ostensible agency. See who can bind a Thai company.
It ends when the principal loses capacity. Under section 826, second paragraph, an agency ends when the principal becomes an incompetent person, unless the contract or the nature of the business indicates otherwise. The person holding the power of attorney may therefore run into trouble at exactly the moment it is needed most.
A director can delegate only as far as the articles allow. If the articles require two directors to sign together, the delegation should be consistent. See delegation of authority matrix.
Banks have their own discretion. Even when the power of attorney is valid, a bank may require its own form and additional documents, so do it in advance and not on the day.

For this reason a power of attorney is a temporary tool, not a long-term answer. For a prolonged condition, you need a director or a guardian appointed through the proper process.

4. Guardians and curators: how do they relate to the business?

When an owner has a condition that stops them managing their own affairs on a continuing basis, family members or interested persons may apply to the court for an order under the Civil and Commercial Code.

A guardian is used when the court orders that a person of unsound mind is an incompetent person. The guardian acts as representative (section 28).
A curator is used when the court orders that a person is a quasi-incompetent person, for example because of physical disability or feeble-mindedness. The curator assists and gives consent to certain kinds of acts (section 32).
An act that needed consent but was done without it may be voidable (section 34).

Points to know from the business side:

A court order is needed, the process takes time, and the order may carry conditions or further supervision.
A guardian or curator appointed by the court does not automatically become a director of the company. Becoming a director still has to follow company law and the articles.
A shareholder who is an incompetent person exercises voting rights through the guardian. Check how the other shareholders or the meeting will recognise this.
The family should prepare the documents and the medical information the court requires, and consult a lawyer about how to apply.

This is not a process to start in a crisis. An owner who plans ahead should prepare a power of attorney, a family agreement and a co-signatory, so the company can keep going in the meantime.

5. When a director must be appointed or replaced

If the existing authorised person is unable to act in the long term, the company may need to appoint a new director or amend the authorised signatories. The general approach is:

Check the company's articles for who may appoint directors, by whose resolution, and with what majority.
Hold a shareholders' or directors' meeting as the articles provide. If the major shareholder cannot act, first check who can vote in that shareholder's place. See holding company meetings online.
Prepare the minutes and keep them at the registered office under section 1207.
Register the change of directors and authorised signatories with the Department of Business Development. See changes after registration.
Notify the bank and relevant agencies, with the new company affidavit.

Appointing a director requires a person who consents to take the position, and the company must remember that changing the authorised signatories affects contracts, licences and documents that refer to the previous signatory. Where the shareholders are evenly split or in conflict, see when shareholders are split 50/50.

6. Proxies for shareholders' meetings

A shareholder who cannot attend a meeting may appoint another person as proxy to attend and vote (section 1187 and related provisions in the part on general meetings). The proxy form must follow the form and conditions set by law and the articles, and the proxy must hand it to the chairman before the meeting.

Points to watch:

A proxy differs from a general power of attorney and applies only to the meeting specified.
If the shareholder who gave the proxy becomes an incompetent person before the meeting date, the validity of the proxy may be questioned, so check with a lawyer.
Having a trusted proxy lined up in advance helps the company approve its financial statements and pay dividends on schedule. For the ordinary meeting under section 1171, see the annual schedule in the corporate calendar for the year.

7. Bank accounts and digital systems

Many companies find that the real problem is the bank and the online systems, more than company law.

Bank accounts

Who may withdraw is as notified to the bank. Check that there are at least two authorised persons and that the signing conditions are consistent with the company affidavit and the articles.
Do not share one person's passwords or authentication device for others to use, because it is risky both legally and for security. Use a power of attorney that the bank accepts, or appoint an additional authorised person. See corporate bank accounts and capital transfers.
Regular payments, such as salaries, tax and rent, should have a payment method that does not depend on one person.

Register of digital accounts

Record the following in a safe place (for example a safe, or a password manager with a backup person who has access), and decide who may open it in an emergency.

The company email and website domain
The accounting system, the tax system and the access rights the accountant uses
Sales and advertising platforms
Online banking and authentication devices
The payroll and social security systems
Cloud services and subscriptions

This register must be updated regularly, and the actual passwords should not be written in a document that many people see. If customers' or employees' personal data is in the systems, look after it in line with the Personal Data Protection Act B.E. 2562 as well.

8. What shareholders and family should agree in advance

Who decides in the owner's place while the owner cannot act, and to what extent.
Who has authority to pay money and sign contracts, and the limit or type of matter that needs joint approval.
Who communicates with employees, customers and the bank.
The conditions for appointing a new director and for shareholders' meetings.
A shareholders' agreement for when one shareholder cannot act. See minority shareholder rights.
The effect on the owner's remuneration and dividends while the owner cannot work.

For a family business, writing these rules down in advance reduces disputes when something happens. See the family business and succession service.

9. The timeline to have in hand if it happens today

Period	What to do
Day 1	Tell those who need to know, use the power of attorney you have, check the payments due soonest
First week	Contact the bank, the accountant and a lawyer, check contracts that must be signed or delivered
First month	If the condition is unclear, assess whether to appoint a director or add an authorised person, and prepare for a meeting under the articles
Longer term	If a court order on a guardian or curator is needed, consult a lawyer about the application and the effect on the company

The actual order and timing depend on the condition, the articles and each company's contracts.

10. Checklist for preparing for an owner who cannot work

There are at least two authorised directors, or a signing mechanism that does not rely on one person.
The articles and the company affidavit have been checked to match what you want.
A power of attorney with a stated scope and period has been made, and the bank has been checked to accept it.
The bank has been told to have more than one person authorised to withdraw.
A register of digital accounts exists, with someone designated to open it in an emergency.
Key company documents are stored: articles, company affidavit, shareholder register, meeting minutes.
The family and shareholders have agreed who decides in an emergency.
The accountant has the access and information to keep filing taxes and running payroll.
Review every year, and whenever a director, bank or key system changes.