On 8 November 2022, the Act on the Amendment of the Civil and Commercial Code (No.23) B.E.2565 (A.D.2022) was announced on the Royal Gazette. This amendment is summarized as follows:
- To reduce the number of minimum shareholders and promoters from three persons to TWO persons (Section 1097 and 1237(4));
- To reduce the validity period of Memorandums of Association from 10 years to 3 years after the registration of the Memorandum of Association prior to registration of a company formation (Section 1099);
- Share certificate of the company must be signed by at least one director and must be affixed with the company’s seal (if any) (Section 1128);
- To further impose the criteria for electronic meetings (Section 1162/1);
- To relax a requirement for submitting the a notice of shareholders’ meeting which reduces the process from (i) publishing the notice in a newspaper and (ii) submitting the registered e-mail to each shareholders to only submitting the registered e-mail. To publish the notice in a newspaper or online media will be required in the case of a company issuing the bearer share certificate (Section 1175);
- To impose the minimum number of proxy and/or shareholders as at least two persons (Section 1178); and
- To impose the completion date for the dividend payment of no less than 1 month from the date of shareholders’ or directors’ meeting that will differ from the previous provision which only stipulated the duration on payment of dividends (Section 1201).
Apart from above, the provision in relation to a merger is also further amended to create the new process for mergers and key issues which are further imposed by the following matters:
- The type of mergers, to be an amalgamation (i) by establishing a new entity and the amalgamating companies will be dissolved and (ii) one of the amalgamating companies still have an entity and other amalgamating companies will be merged. (Section1238);
- The solution in the event that any shareholders object to the merger (Section 1239/1);
- The merger notification and the duration period for objections to the merger to the company’s debtors. As noted, there is a merger condition that the company is unable to merge in the event that such objections will not be solved by repayment or providing any security on such obligations (Section 1240);
- The agendas after the merger such as: name of the company, objectives, share allocation, or name of directors and accountant (Section 1240/1); and
- The date for the handover of the business, properties, account, documents, and other evidence within 7 days after the shareholders’ meeting on consideration of the merger (Section 1240/3).
The amendment will be effective from 7 February 2023 and all companies in Thailand must comply with it.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.