August 7, 2020
Proposed law amendment to facilitate the process of setting a business in Thailand
Founder of Smart Legal Solutions
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In order to encourage the creation of new companies and improving the Thai business climate in Thailand, on June 2020, the Thai Cabinet introduced an Amendment to Thailand’s Civil & Commerce Code to facilitate the process for setting and conducting a business in Thailand. The enactment of these amendments to the law is still pending the approval of the Thai Parliament.
These law amendments are intended to provide greater flexibility for company registration process and also allow the use of technology for the corporate operations. The main points of the proposed amendments to the Thai Civil and Commercial Code are as follows:
Facilitate the company registration process and corporate changes
As a measure to speed the registration process, the private companies could submit their applications for registration and subsequent corporate changes at any approved Department of Business Development office, regardless of the location of the company.
Approval of company decisions by electronic meetings
In order to facilitate and formalize the company decisions-making, the private companies would be allowed to conduct shareholders and directors meetings by electronic means.
Minimum number of company promoters and shareholders
The minimum number of promoters and shareholders required to incorporate a Thai limited company could be reduced from three to only two.
Shareholders’ meeting quorum
A minimum of two shareholders would be required to attend the shareholders meetings, either in person or by proxy.
In contrast to the concept of “amalgamation” recognized by the law, whereby a new company is formed through the integration of two or more entities. The draft amendments introduce the concept of “merger”, whereby a company may absorb another existing entity by taking over all its company’s assets, human resources, etc.
Dividends payment timeline
The proposed amendment sets a limit of one month for companies to make their dividends payments from the approval date at the relevant meeting.