Thailand

www.chandlermhm.com

The National Council for Peace and Order (the “NCPO”) has considered the lack of clarity on conditions, procedures and time limitations related to the laws governing business operations, as these are critical issues for investors when considering doing business in Thailand. Thus, the NCPO decided it was imperative to amend related laws in order to provide better understanding of, and increase the ease of doing business in Thailand. Therefore, the NCPO issued Order No. 21/2560 on 4 April 2017, which was published in the Government Gazette and came into effect on the same day, to amend significant laws governing business operations in order to improve and facilitate doing business in Thailand. Section 100 of the Public Company Act B.E. 2535 (1992) was among the amended laws.

The Amendment

Section 100: Under the previous Public Company Act, Section 100 only stipulated a condition affecting shareholders when requesting the board of directors (“BOD”) to call for an extraordinary meeting of shareholders (“EGM”). This section did not include an option covering the case where the BOD did not take action. The amended Act now also includes two new elements: 1) the procedure to be undertaken upon the request from shareholders to the BOD and, 2) the addition of supplementary clauses allowing shareholders to proceed to the EGM without relying on the BOD.​

Firstly, the qualification for shareholders to subscribe their names to a notice requesting the BOD to convene an EGM has been modified. The new law only requires shareholders, holding shares of not less than 10% of the total number of shares sold, to proceed with such action. Upon receiving such a request, the BOD must arrange for the meeting within 45 days. The previous provision, required either, (a) shareholders holding shares of not less than 1/5 of the total number of shares sold (i.e. 20% of the total number of shares sold), or (b) a total of not less than 25 shareholders, holding shares of not less than 1/10 of the total shares sold, (i.e. 10% of the total number of shares sold), to subscribe their names to a notice. The previous provision further required that the BOD would convene the meeting within 1 month.

Secondly, the new law now entitles shareholders to hold the meeting, in the case where the BOD fails to proceed when the period of 45-day has elapsed; this is subject to a condition that such group of shareholders shall convene the meeting within 45 days from the previous 45-day due date. Nevertheless, the quorum conditions remain unchanged; there shall be, (a) at least 25 shareholders or not less than one half of the total number of shareholders, and (b) such group of shareholders should hold shares of not less than 1/3 of the total number of shares sold, and be present at the meeting to constitute a quorum.

Also, it is to be noted that in the case where the meeting, convened by the group of shareholders under the new law, meets the requirement of the quorum, the company shall pay any expense incurred from the meeting. At the same time, if the quorum requirement is not met, such meeting shall be cancelled and the shareholders who called for the meeting shall cover the expenses themselves.​

Note

In summary, the newly amended section 100 of the Public Company Act B.E. 2535 (1992) equips shareholders with expanded capabilities for convening the EGM. The current changes to the Act also become important in the case where there is a disagreement among shareholders and the BOD. It is thus, critical, for companies and especially the shareholders to be aware of and understand, changes under Section 100, of the Public Company Act.​

This update is intended to highlight an overview of key issues for ease of understanding, and not for the provision of legal advice. If you have any questions about this publication, please contact your regular contact persons at Mori Hamada & Matsumoto or Chandler MHM Limited, or any of the Key Contacts listed to the right.

Key Contacts
Ratana Poonsombudlert
TEL 66-2-266-6485 Ext 153
(ratana.p@chandlermhm.com)

Ubolmas Sathiensopon
TEL 66-2-266-6485 Ext 221
(ubolmas.s@chandlermhm.com)

Athiwuth Phanprechakij
TEL 66-2-266-6485 Ext 221
(athiwuth.p@chandlermhm.com)

Supakan Nimmanterdwong
TEL 66-2-266-6485 Ext 148
(supakan.n@chandlermhm.com)​

Chandler MHM Limited
7th-9th, 16th Floor, Bubhajit Building, 20 North Sathorn Road, Bangkok 10500, Thailand
www.chandlermhm.com

 

Tags: Thailand
Related Articles by Firm
Amendment to Thai Arbitration Act
The Amendment expands the ability of foreign arbitrators and representatives to act in arbitral proceedings.
Update on Stamp Duty regulating electronic transactions
A new notification requires parties who enter certain electronic transactions to pay stamp duty in cash.
Ministerial Regulation removing back office services from the Foreign Business Operations Act announced
Certain back office service businesses will no longer require a foreign business licence.
Developments in Thai M&A
Corrupt practices, environmental breaches and merger filing are becoming more significant priorities for clients ...
Thailand: Projects and Energy
Commentary on the latest developments in the Thai projects and energy sector ...
Secondary laws under the Trade Competition Act BE 2560
The enactment of these five Notifications represents a significant leap of progress.
Thailand Update: Amendment to Work Permit Law
In response to criticism, the government decided to amend the Emergency Decree on Managing of Foreigners with relaxed penalties ...
Leasing of residential buildings − A contract-controlled business
The Contract Committee of The Consumer Protection Board recently announced a new Notification which designates the lease of residential property as a “contract-controlled business”.
New Mining Regulations for Thailand
On 30th January 2018, the Ministry of Industry issued a new notification regarding prohibited actions for foreigners ...
Mergers and acquisitions in Thailand
A number of factors are making Thailand a target of choice for international and regional investment ...
Thailand Anti-Corruption Update
National Anti-Corruption Commission Guidelines to Supplement Section 123/5 of the Organic Act on Counter Corruption ...
Amendment to the Thai Civil and Commercial Code
Part IX: Combination of Limited Companies ...
Thailand: The Act on the Amendment to the Civil Procedure Code (No. 30) B.E. 2560 (2017)
There are a number of amendments to the current Civil Procedure Code (CPC) as part of its legal execution ...
Projects & Energy Special Report: Thailand: New Minerals Act
A new Minerals Act (BE 2560 (2017) was published on March 2, 2017 and took effect on August 30, 2017 (180 days after the publication date) ...
Thailand: ERC Announcement - Purchase of Electricity From Hybrid-Renewable Energy Small Power Producers
The Energy Regulatory Commission (ERC) issued an invitation to bid for the sale of electricity from Hybrid-Renewable Energy Small Power Producers (SPP) on 4 August 2017 ...
Thailand: New Amendment to the Labor Law
The Labor Protection Act B.E. 2541 (“LPA”) was first enacted in February 1998; the LPA has been amended several times ...
Thailand: Extension of the Reduced VAT Rate
Value added tax (VAT) is an indirect, non-cumulative, consumption tax levied on the supply of goods or provision of services in Thailand ...
Thailand: Ten year visa extension
Due to the rapidly increasing number of foreign senior-citizens seeking Thailand as a retirement destination, Thailand’s Cabinet recently approved the ten-year retirement visa extension ...
Thailand: The New Trade Competition Act
On 24 March 2017, the National Legislative Assembly (the “NLA”) in Thailand passed the final reading of the draft Trade Competition Act ...
Thailand: Amendment to BOI Act to create new BOI benefits
The Thai government has recently been promoting “Thailand 4.0”, which refers to creative and innovative industries ... as a master plan to pull Thailand out of the middle-income trap and toward becoming a high-income country ...
Energising Thailand’s M&A sector
With a focus on the energy and natural resources sector, Chandler & Thong-ek Partner Ratana Poonsombudlert answers our questions on Thailand’s M&A present and future
Related Articles
New challenges for investors in the US – CFIUS
It would be a mistake to underestimate the growing power of CFIUS to regulate foreign investors in US companies.
New transparency registry for all private BC companies in the offing
If the bill comes into force it will have far reaching compliance consequences for all private BC companies.
Doing business and ease of doing business in India
The government has taken numerous steps to give an impetus to foreign investment, but a lot remains to be done.
Related Articles by Jurisdiction
Developments in Thai M&A
Corrupt practices, environmental breaches and merger filing are becoming more significant priorities for clients ...
Employment Special Report
Organisations in Asia, as with elsewhere in the world, cannot function effectively without a well-organised and responsive workforce. Labour disturbances can, therefore, quickly throw a company’s operations into turmoil. In our Special Report on Employment this month, we hear ...
Thailand: Projects and Energy
Commentary on the latest developments in the Thai projects and energy sector ...
Latest Articles
Press Release: New Bilingual Standard Templates for China’s New Foreign Investment Regime
Top multinational and China SOE in-house lawyers and heavyweight Chinese and international law firms join forces with legaltech start-up docQbot and The In-House Community™ to help create new bilingual standard templates for China’s new foreign investment regime ...
New challenges for investors in the US – CFIUS
It would be a mistake to underestimate the growing power of CFIUS to regulate foreign investors in US companies.
New transparency registry for all private BC companies in the offing
If the bill comes into force it will have far reaching compliance consequences for all private BC companies.