In May 2021, Thailand’s Cabinet approved the draft amendments to the country’s Public Limited Companies Act in a bid to modernize the corporate process by allowing meetings between shareholders and directors to be held online, enabling the flexibility to send information between directors and shareholders electronically, and enabling shareholders to appoint a proxy electronically.
The proposed amendments aim to improve the efficiency of and bring consistency to Thailand’s corporate system and procedures that were impacted by the pandemic, as borders were closed and logistics disrupted, leading to the loss in competitiveness for local businesses.
There are several important amendments to the newly proposed Public Limited Companies Act.
Under the proposed amendments, any announcement of the public company’s matters can be done through electronic means, whereas currently, the Public Limited Company Act demands that any notices or statements made by public limited companies must be done through Thai-language/national daily newspapers distributed in the area of the company’s headquarter.
Meetings taking place between the company’s board of directors (BOD) or shareholders may be held via electronic or digital means in conformity with the relevant laws and regulations under the proposed amendments. The headquarter of the company shall be deemed the venue for such meetings.
Currently, meetings taking place between the company’s board of directors or shareholders shall be held in the region of the public company’s general headquarter area unless the articles of association of the company say otherwise.
There are two methods for calling a BOD meeting. The first method is for the chairman to call for the meeting since they will have the summoning rights. The second method is to allow the meeting to be initiated by at least two directors, who have requested upon the chairman call a board of directors meeting. If the chairman refuses to or is unable to call the meeting within a stipulated 14-day period, a deadlock can occur.
The proposed amendments provide that the company or BOD can send letters or documents to directors, shareholders, or creditors electronically. Those persons, however, must have declared their intentions to receive such documents and letters via electronic means.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected].
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