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Incorporation
Types of shareholder meetings for a company in Thailand
13/12/2022
Shareholder meetings in Thailand are used as a way to address the company’s performance or any issues to be approved. Such meetings are also used to decide essential outcomes relating to the company, such as appointing new directors or amending the company’s Articles of Association.
In Thailand, there are two types of shareholder meetings:
- General meeting of shareholders
- Extraordinary shareholder meeting
We will now explore what both of these meetings are and when they are used.
Key points
- Thai companies are subject to 2 types of shareholder meetings: General and Extraordinary.
- Companies are required to hold their first general shareholders meeting within the first six months after incorporation. They are then required to hold a general meeting every year to approve the company’s financial statements.
- Companies are required to submit an advance notice for the meeting.
General meeting of shareholders
As per the Thai Civil and Commercial Code, the company’s first general meeting must be held within the first six months after the company is incorporated.
After the initial meeting, companies should convene a general meeting once a year.
What is discussed in general shareholder meetings?
General shareholder meetings allow companies to discuss the following matters:
- Approval of the minutes of the previous ordinary shareholder meeting
- Report the company’s activities during the past year
- Appoint new directors to replace directors who have been terminated
- Approve the company’s balance sheets and profit and loss statements
- Decide on dividend payments
- Appoint of auditor and remuneration
Notice for a general shareholder meeting
The Thai Civil and Commercial Code sets out the requirements relating to the notice for a general shareholders meeting.
The notice for the general meeting must be published in a local newspaper at least seven days before the meeting date.
Notice for the meeting must also be sent by registered post to shareholders (included in the register of shareholders) seven days before the meeting. Notice for a special resolution must be sent 14 days before the general meeting.
The notification for the meeting should include the following info:
- Location for the meeting
- Date and time for the meeting
- Nature of the business to be carried out
- If a special resolution is to be made in the meeting, details of the proposed special resolution should be included.
Please note there has been a recent amendment proposed for the Civil and Commercial Code. Should this amendment be adopted, the following will apply. 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.
Quorum requirements for the general meeting
A general meeting of the shareholders can only be held if the amount of shareholders present for the meeting is equivalent to at least one-fourth of the company’s capital.
If the meeting has convened at the request of the shareholders and the required quorum is not present within an hour from the appointment start time, the meeting will be dismissed.
If the general meeting was not summoned upon the request of the shareholders, another general meeting must be held within 14 days, and no quorum will be required.
Chairman of the general meeting
Under section 1180 of the Civil and Commercial Code, the chairman of the board of directors must preside over every general meeting of shareholders.
If there is no chairman or they have yet to arrive within 15 minutes of the appointed time, the shareholders may elect one of their members to act as the chairman.
Extraordinary shareholder meeting
Extraordinary shareholder meetings will typically only be called when an urgent issue needs addressing. In these meetings, the shareholders will approve or decline any proposed changes.
What is discussed at an extraordinary shareholder meeting?
The following issues require an extraordinary shareholder meeting to be called:
- Changing company directors
- Amending the company’s articles of association
- Changing the company’s objectives
- Moving the registered address of the company to another province
When is an extraordinary shareholder meeting called?
Section 1172 of the Civil and Commercial Code sets out who has the right to call an extraordinary shareholder meeting. As per section 1172, an extraordinary shareholder meeting must be called if:
- The directors deem an extraordinary meeting to be appropriate.
- The company has lost half of the amount of its capital to inform shareholders of the loss.
- Shareholders holding not less than one-fifth of the company’s shares calls for a meeting in writing.
If the shareholder’s call has called the extraordinary shareholder meeting, the directors must immediately hold the meeting. If the extraordinary meeting is not held within 30 days, shareholders holding the required amount of company shares may summon it themselves.
Voting by proxy at a shareholder meeting
Voting by proxy is possible for shareholders. When a shareholder wishes to vote by proxy, they are required to formally appoint a proxy in writing and send a notice to the other shareholders.
When appointing a proxy, the following information is required to be included in the notice:
- Number of shares held by the shareholder
- Name of the proxy
- Meeting(s) in which the proxy is to be present
- Date and signature of the shareholder
Resolutions
In Thailand, there are two types of shareholders’ resolutions: ordinary and special resolutions.
Ordinary resolutions can be made at any shareholder meeting.
Special resolutions, on the other hand, are a legal requirement for the following actions:
- Amending the Memorandum of Association or Articles of Association
- Increasing the capital by issuing new shares
- Decreasing capital
- Dissolving or merging the company
Just so you know, under the proposed amendment to the Civil and Commercial Code, at least two shareholders must be present to pass any resolution during a general meeting of shareholders. These shareholders can be present in person or via proxy and must represent at least one-quarter of the company’s capital.
How can Belaws help?
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Frequently asked questions
Can a foreigner buy a land in Thailand?
Yes, On October 25, 2022, Thailand’s cabinet approved in principle a draft Ministerial Regulation which would permit certain groups of foreign nationals to acquire land for residential use in Thailand.
Can I get visa if I buy a property in Thailand?
The LTR (available Sep 2022) allows applicants who have invested USD 500,000 in real estate in Thailand to apply for this visa
Can foreigners buy property in Thailand 2023?
Yes, foreigners are able to purchase condo units
Can a foreigner own a villa in Thailand?
Yes, since October 2022 foreigners are allowed to own a land in Thailand
Can a foreigner open a company in Thailand?
Yes it is possible for a foreigner to open a company in Thailand. There are also options available which allow 100% foreign owned companies as well.
Where is the best place to buy property in Thailand?
Bangkok, Phuket, Samui and Chiang Mai are some of the most popular destinations for purchasing propertyl.
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