Merger Scheme and Flexibility for Corporate Governance of Thai Limited Companies 泰國有限公司的合併計劃和公司治理的彈性
On September 14, 2022, the draft of Act Amending (the “Amendment Act”) Thai Civil and Commercial Code (“TCCC”) on partnerships and limited companies was approved by the Parliament and will be effective 90 days, following the publication in Government Gazette. A new M&A scheme and amended corporate governance requirements have been introduced under the Amendment Act. The Thai Department of Business Development (“DBD”) drafted the Amendment Act with the goal to facilitate business operations by revising outdated requirements, canceling excessive corporate compliance obligations, and promoting a business consolidation scheme under TCCC. The proposed changes under the Amendment Act are as follows:
2022 年 9 月 14 日，《泰國民商法》（“TCCC”）關於合夥企業和有限公司的修正法案（“《修正案》”）草案獲得泰國國會通過，將於政府公報公佈後 90 天生效。一項新的章程計劃和經修訂的公司治理要求已根據《修正案》引入。泰國商業發展部（“DBD”）起草修正案，旨在通過修改過時的要求、取消過多的公司合規義務以及促進 CCC業務整合計劃來促進業務運營。根據《修正案》提出的修改如下：
Ø Minimum number of Promoters
The minimum number of Promoters reduces from three individuals to two individuals under the Amendment Act.
Ø Memorandum of Association (“M&A”)
In the previous iteration of the Law regarding a company’s M&A, there are no limits nor deadlines when company should be incorporated. However, the Amendment Act has declared that the company must be incorporated within 3 years after the registration of M&A, otherwise, it is deemed to be invalid. Prior to the date of enforcement of the new Amendment, if the company has possessed the M&A that is registered for more than 3 years, it is a requirement that the company must be incorporated within 180 days after the enforcement of the new amendments.
關於公司章程的上一版規定，對於何時應成立公司沒有限制或截止日期。但《修正案》規定公司必須在登記章程後3年內成立，否則視為無效。在新法實施之日之前，如果公司持有已註冊登記的公司章程超過 3 年，要求公司必須在新修法實施後180日內設立公司。
In accordance to the Amendment Act, such company should be incorporated within 3 months, starting from the date of registering M&A with DBD. If the company fails to comply, the registered M&A will be invalid.
根據《修正案》，公司應在向 DBD 登記M&A之日起三個月內成立。如果公司未遵守規定，註冊的M&A將無效。
Ø Minimum number of Shareholders
The Amendment Act will provide the power to the court to order the dissolution of a Company when there possesses only one shareholder. In addition, when a partnership transforms into a limited company, there is no longer of having at least three shareholders prior to the transformation.
Ø Share Certificate
From the Amendment Act, it is now required by law for the company to the affixing of company seal (if any) on the Company’s Share Certificate for greater clarity.
Ø Arrangement of Board of Director’s Meeting董事會會議安排
The board of director’s meeting now can be held electronically, unless such method is strictly prohibited by the company’s Article of Association. However, such meeting arrangement must still comply with the Emergency Decree on Electronic Meeting B.E. 2563 (2020).
Ø Delivery of Notice of Shareholder’s General Meeting股東大會通知的送達
With the Amendment Act, the compliance of delivering the notice of the meeting is reduced from doing both of (i) sending the company’s meeting invitation via postal services with acknowledgment receipt and (ii) publishing invitation via a local newspaper, to only one method of doing the postal mail is enough is deemed in compliance with the law. Moreover, the Amendment Act also allow the company to do such invitations through electronic system. The methods and permitted form of such delivery will be announced later by the authorities.
On the other hand, the Company that issued the Bearer Shares still remains unchanged. It is still required by law to do both methods of invitation.
Ø Quorum of Shareholder’s General Meeting股東大會法定人數
The quorum for a meeting will be reduced to at least two shareholders or proxies.
Ø The Amendment Act introduces the concept of business consolidation through a merger. The concept of mergers will become an alternative structure for M&A transactions in Thailand.
Previously the Status of “Merger” is not being prescribed or recognized. In Thai Civil and Commercial code, it is allowed two private or public company to be merged together under a newly created company (I.E if Company A wishes to be merged by Company B, rather than dissolving Company A and transferring all assets to Company B, the system would only allow both Company to be merged as a new Company C, and dissolved both A and B).
Such practices are time and resource consuming, but the practices is simply the same as merging the company in other law. New Amendment would allow the “Merger” company to exist, rather than dissolving the both company and thus, resulting in a quicker and much less time consuming in registration.
In addition, an amalgamation or a merger of limited companies must be approved by a shareholders’ special meeting. If any shareholder votes against the transaction, the company must arrange the mandatory purchase of shares held by that dissenting shareholders at the agreed price or the price assessed by the asset evaluator.
Furthermore, publication of an amalgamation/merger in a daily newspaper is required. Nevertheless, creditor’s objection period is reduced from 60 days to 1 month starting from the date of receipt the notice.
此外，還需要在日報發布合併。債權人的異議期由 60 天縮短至 1個月自收到通知之日起。
We will keep you posted for further updates regarding this new scheme and related details.
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