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Amendment of Thailand CCC relating to company laws
In this issue, we provide to our clients, members of Chamber of Commerce, and friends up-to-date information and details regarding the amendment of Thailand Civil and Commercial Code (“CCC”) relating to partnerships and companies, which has been in effectsince 7th February 2023, onwards.
This amendment makes several changes which aim to reduce obstacles and give relaxation on corporate formalities for private limited companies.
In brief, the key amendments relating to such company law are as follows:
|Minimum number of promoters and shareholders||
-At least 2 individuals for being the company’s promoters resulting that requirement of minimum number of shareholders is reduced from 3 to be 2 as well.
|Under previous CCC, minimum requirement is at least 3 individuals for being the company’s promoters and at least 3 persons (either individual or juristic person) for being shareholders.|
|Memorandum of Association (“MOA”) prior to registration of company incorporation||
-MOA shall be made at least in two original copies.
-If the registration of company establishment is not made within three years from the date of registration of the MOA with DBD, such MOA shall become ineffective.
|Under previous CCC, the validity of MOA prior to registration of company incorporation is 10 years.|
|Deadlock solution||-Provisions of Articles of Association (“AOA”) of the company should also include the method/solution for resolving problems or disputes between the directors or the shareholders (Deadlock).|
|Share certificate||-If the company has a company’s seal, the Share certificate shall be affixed the company seal as well.||Under previous CCC, it is not compulsory required to affix company’s seal on share certificate for the company having a registered seal.|
|Meeting via electronic means||
– Board of Directors Meeting can also be conducted via electronic means (not only physical meeting), unless it is prohibited under the company’s AOA.
A director who attends the meeting via electronic means will be counted within the quorum and would be entitled to vote at the meeting.
In such case, meetings via electronic means must comply with the provisions of the applicable electronic meeting regulations as well.
|This is amended to add e-meeting as an acceptable method.|
|Notice for calling Shareholders Meeting||-There will be no requirement to publish a notice calling for a meeting of the shareholders in a local newspaper anymore, unless the company has share certificates issued to bearers and/or the company’s AOA stipulated otherwise.||
This amendment is to provide relaxation of burden or duty to publish notice for calling shareholders meeting in local newspaper.
According to DBD’s interpretation, such relaxation on meeting notice publication will be applied only for the companies that have not specified such duty in their existing AOA as registered with DBD. This means that if the registered AOA of any company still have contents relating such duty specified therein, the company shall still be required to publish the notice in newspaper until the AOA amendment by eliminating such duty is made and registered with DBD.
|Number of shareholders required for Shareholders Meeting||-Shareholders Meeting must have at least two shareholders and representing at least 25% of company’s capital, attending the meeting||This is amended to add the requirement on minimum number of shareholders attending the Shareholders Meeting to constitute the quorum.|
|Dividend payment||-Distribution of dividends must be completed within one month of a shareholders’ meeting or the directors passing a resolution on dividend payment.||This is amended to provide clearer provision that the dividend payment to shareholders has to be completed within 1 month from the date of passing the resolution by the shareholder meeting to Board of Directors meeting.|
|Causes to request the court to dissolve the company||-If the number of shareholders is reduced to 1 shareholder.||
Under previous CCC, if the number of shareholders is reduced to be less than 3 shareholders, it shall be one of the causes to request the court to dissolve the company.
This amendment is made to be in line with the reduction of minimum requirement of promoters and shareholders from 3 to be 2.
Two or more companies can be merged in one of the following types, i.e.
(i) The combination results in the formation of a new company and none of merged companies survives.
(For example: Company A + Company B = Company C); OR
(ii) The combination results in one company being merged into another company, and the merged company will be ceased while the other will survive
(For example: Company A + Company B = Company A or B)
|This is amended to recognize additional concept of company merger and to prescribe the required merger processes therein.|
The information provided in this newsletter is a summary of the new laws and regulations which has been announced. Please contact our lawyers or e-mail us if you have any further inquiry.
Mr. Wichien Harnpraween
Tel:+662 2592627 thru 9
Fax: +662 2592630