Stay Up-to-Date: Thailand’s DBD Issues Clarifications on Shareholders’ Meeting Notice Publication Requirements
Thailand’s Department of Business Development (DBD) recent amendment to the Civil and Commercial Code (CCC) came into effect on the 7th of February. This amendment made significant changes to the CCC, and as a result, some companies have been experiencing a little confusion as to their compliance requirements.
Therefore, the DBD has clarified that even though the amended Civil and Commercial Code (CCC) is now in full effect, companies with articles of association that were drafted in accordance with the previous version of the CCC, will still have to follow the previous requirements for publication of shareholders’ meeting notices.
- The recent amendment to the Civil and Commercial Code came into effect on the 7th of February.
- The new amendment to the CCC changes corporate governance and transactional rules in Thailand.
- If a company’s articles of association were drafted under the previous version of the CCC, they are still required to announce a general meeting of shareholders in a local newspaper.
What amendments were made to the CCC?
The new amendment to the CCC introduces the following changes to corporate governance and transactional rules in Thailand:
- Only two shareholders are necessary to register a company (instead of 3 previously)
- The requirement to submit a notice calling a general meeting of the shareholders will no longer be required to be published in a local newspaper and now only requires the notice to be sent to existing shareholders via post. However, if a company issues bearer certificates, a notice calling a general meeting of shareholders must still be published either in a local newspaper or via electronic media.
- At least two shareholders must be present to pass any resolution during a general meeting of shareholders. These shareholders can be current in person or via proxy and must represent at least one-quarter of the company’s capital.
- Distributing dividends must be completed within one month of a shareholders’ meeting or the directors passing a resolution on dividend payment.
- A company may be dissolved by court order due to the number of shareholders decreasing to one.
Where has the confusion arisen?
Under the newly amended CCC, the requirement for companies to publish a notice for the calling of general shareholders meeting in a local newspaper has been removed. Now companies can call a general meeting of shareholders by either;
- sending a notice by post (acknowledgment of receipt) or,
- delivering the notice in person.
Please note that any company that has issued share certificates to bearers must publish a notice in a local newspaper or via electronic means.
Despite these new updated requirements, the DBD has stated that the new CCC will not result in a universal change in how companies are required to inform their shareholders about the calling of a general shareholders’ meeting. Therefore, if a company’s articles of association were drafted under the previous version of the CCC, it is still a mandatory requirement for them to announce a general meeting of shareholders in a local newspaper.
If a company wishes to follow the new amendments and no longer has to publish this announcement in a newspaper, it will have to modify its articles of association.
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