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25 July 2008
2008 AMENDMENTS TO THAI COMPANY LAW
Effective 1 July 2008
Amendment no. 18 to the CCC was published in the Government Gazette on March 3, 2008. Section 2 of the Act provides that the Act will come into force 120 days from the date published in the Government Gazette, i.e., 1 July 2008.
Summary of Amendments
Amendment no. 18 includes a number of amendments to provisions of the CCC relating to private limited companies, as follows:
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1. |
Minimum number of shareholders. The amendment to CCC 1097 reduces the minimum numbers of promoters for establishing the new Company from seven promoters to three promoters. Therefore, the minimum shareholders requirement for the Company shall be at all time not less than three persons. |
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2. |
Time to register a limited company. New CCC 1111/1 allows a Company to be incorporated and registered simultaneously on the same day as the memorandum of association provided that: |
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(1) |
All registered shares have been subscribed for; |
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(2) |
The statutory meeting is held to transact the business with the presence of all promoters and subscribers, and all promoters and subscribers have approved the transacted business |
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(3) |
The promoters have handed over the business to the directors; and |
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The payment of at least 25% of the total shares has been paid by the shareholders. |
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Notices of general meetings. The amendment to CCC 1175 provides that notices of general meetings of shareholders must be published in a newspaper and be sent to each shareholder by registered mail return receipt requested. |
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“Section 1175. Notice of a general meeting shall be published at least once in a local newspaper not later than seven days before the date fixed for the meeting, and sent by mail with return receipt requested, to every shareholder whose name appears in the register of shareholders not later than seven days before the date fixed for the meeting, except for notice of a general meeting for adopting a special resolution, in which case such act shall be done not later than fourteen days before the date fixed for the meeting. The notice shall specify the place, the day and the hour of meeting and the nature of the business to be transacted. In case of notice of a general meeting for adopting a special resolution, the substance of the proposed resolution must also be included.” |
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Although this is not a substantive change, it will require more careful organization for giving notices of general meetings. |
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“Special resolutions” by one meeting. The amendment to CCC 1194 provides for adoption of a “special resolution” by one meeting (instead of two meetings) of the shareholders, with 75% vote. |
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Reductions of capital. The amendment to CCC 1226 expedites the process to reduce the capital by reducing the newspaper publication requirement from seven times to one time only, and reducing the objection period from three months to 30 days. |
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Amalgamations. The amendment to CCC 1240 expedites the amalgamation process by reducing the objection period from six months to 60 days. |
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Related Subjects
Need to amend existing Articles of Association
Certain of the 2008 amendments override inconsistent provisions of existing articles of association. For example, amended CCC 1175 requiring notices of general meetings be both published in a local newspaper and sent by mail return receipt requested overrides an inconsistent article. However, the language of certain existing articles may govern administration of a company until they are amended, for example:
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requirement for minimum of seven shareholders. |
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requirement for two consecutive shareholder meetings to adopt a “special resolution”. |
New internal policies of CRO
Articles which provide a right of directors to vote in person or by proxy has long been accepted by the CRO. However, last year the CRO adopted an internal policy not to approve any article which provided that directors could vote by proxy. We understand that companies whose articles of association provide that directors may vote by proxy may continue to do so. However, if a company adopts a new set of articles of association, the CRO will not accept such an article.
Many companies provide for decisions of directors to be made by a circular resolution instead of at a meeting. We understand that the CRO will continue to approve articles providing for decisions by circular resolution.
Author:
Chandler and Thong-ek
