If you operate a company in Thailand, or are planning to establish one, the following information will be crucial for you. Effective February 7, 2023, the Civil and Commercial Code of Thailand (CCC) underwent significant amendments concerning corporate law. Here’s a summary of the key changes:
Two Shareholders Instead of Three
A private limited company now needs to be established by at least two promoters and must maintain a minimum of two shareholders at all times. Previously, the requirement was for three promoters (shareholders).
M&A: Introduction of Merger
Under the previous Thai legislation, mergers by acquisition were not permitted as an M&A strategy. Only amalgamations were allowed, where companies A and B would transfer all rights and obligations to a newly formed company C, leading to the cessation of companies A and B. Now, mergers by acquisition are possible – for example, company B can transfer all its rights and obligations to company A, after which company B ceases to exist.
Board of Directors Meetings
Boards of directors are now authorized to conduct meetings using electronic communication methods.
Notices of Shareholders’ Meetings
There is no longer a requirement for companies to publish information about shareholders’ meetings in a local newspaper, except in cases where bearer shares are issued. Notification to shareholders by mail with acknowledgment of receipt, or personal delivery of the notice, is now sufficient.
However, it is important to note, as clarified by the Department of Business Development (DBD), that these amendments do not automatically apply to all companies. If a company’s charter was established under the previous CCC regulations, it is still required to publish meeting notices in a newspaper. To bypass this requirement, the company’s charter must be amended accordingly.
Quorum for Shareholders’ Meetings
The presence of at least two shareholders, representing a minimum of one quarter of the company’s capital, is required for a quorum at shareholders’ meetings.
Dividend Payouts
Dividends must be paid in full within one month following the decision to distribute them.
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