11 August 2021
Thailand

Proposed Amendments to the Public Limited Company Act

To keep up with the digital era, the Thai Cabinet recently approved a draft proposed amendment (the “draft amendment”) to the Public Limited Company Act B.E. 2532 (1992) on 11 May 2021 (the “Act”). The draft amendment mainly aims to revamp the corporate processes, which are inconsistent with the current situation brought about by the COVID-19 pandemic. The changes will help facilitate business continuity by removing outdated and complicated requirements and adopting the use of electronic methods into the corporate process.

The draft amendment will be introduced to the National Legislative Assembly for their approval. Once approved, the draft amendment shall come into force upon the expiration of 30 days from the date of its publication in the Royal Thai Government Gazette.

The key points of the draft amendment are as follows:

The key points of the draft amendmentDraft Public Limited Company ActCommentary
Advertisement of the Public Company’s Matter

 

Section 3. The following provision shall be added as paragraph three of section 6 of Public Limited Company Act B.E. 2535:

“The undertaking prescribed in paragraph one may be carried out by advertising via any other electronic medias according to the criteria stipulated by the Registrar.”

Currently, section 6 provides that the public company is required to notify, advertise, and publicise any statements relating to any companies in Thai language via the daily newspapers distributed in the area where the principal office is located.

The draft amendment provides that such advertising may be carried out via any electronic means other than in newspapers.

Delivery of  Letters and Documents by the Public Company or Board of Director (“BOD”)

 

Section 4. The following provision shall be added as section 7/1 of Public Limited Company Act B.E. 2535:

“Section 7/1. In the case a company or Board of Directors has duties to send letters or documents as per this Act to directors, shareholders, or creditors of the company; if such person has declared intention or given consent for electronic submission of such letters or documents, the company or Board of Directors may send such letters or documents via electronic methods according to the criteria stipulated by the Registrar.”

Section 7 requires the public company to send an order, notice and any letters or documents to the recipient in person or via registered post.

The draft amendment further provides that the public company or BOD may send letters or documents to directors, shareholders, or creditors via electronic means, provided that those persons have declared their intentions or given their consents to receive such letters or documents via electronic means.

BOD’s meeting and Shareholders’ MeetingSection 5. The provision of section 79 of Public Limited Company Act B.E. 2535 shall be repealed and replaced with the following provision:

“Section 79. The board of directors must meet at least once every three months at the locality where the principal business office of the company is located or in a nearby province unless the articles of association of the company require meetings to be held elsewhere in the Kingdom of Thailand.

Unless otherwise specifically indicated in the articles of association, the meeting in paragraph one may be conducted via electronic medias as prescribed in the law on electronic meeting. In such case, it shall be deemed that the principal business office of the company is the place of the meeting in paragraph one.”

The relevant sections[1] does not specify the options for the BOD’s and Shareholders’ Meeting. Typically, both BOD’s and Shareholders’ meeting take place physically.

As such, the draft amendment allows for the meetings to be conducted via electronic means according to law related to electronic meeting.

The draft amendment also provides that the place of the meeting is the principal office of the company unless the Articles of Association of the company provides otherwise.

Section 9. The following provision shall be added as paragraph three of section 98 of Public Limited Company Act B.E. 2535:

“Unless otherwise specifically indicated in the articles of association, shareholders meeting may be carried out via electronic methods according to the law on electronic meeting.”

Section 10. The following provision shall be added as paragraph three of section 101 of Public Limited Company Act B.E. 2535:

“In the case of shareholders meeting carried out via electronic methods as prescribed in section 98 paragraph three, the principal business office of a company shall be deemed as the place of the meeting.”

Authority to Summon the BOD’s Meeting

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Section 6. The provision of section 81 of Public Limited Company Act B.E. 2535 shall be repealed and replaced with the following provision:

“Section 81. Meetings of the Board of Directors shall be summoned by the chairperson of the Board of Directors.

In the case, there is a probable cause or in order to protect rights or benefits of a company, at least two directors may jointly request the chairperson to summon a meeting provided that agendas to be considered in the meeting have been notified to the chairperson with such request. Thus, the chairperson shall summon and fix the date of the meeting within fourteen days as from receiving the request.

In the case, the chairperson does not proceed with the provision in paragraph two, directors who made the request may summon and fix the date of the meeting for consideration of the notified agendas within fourteen days after the expiration of the duration in paragraph two.”

Section 81 determines that the chairman has the sole authority to summon the BOD’s meeting regardless of whether the BOD’s meeting is initiated by chairman himself or initiated by requests of at least two directors. Therefore, a deadlock might occur in the case chairman refuses to call for the BOD’s meeting.

To resolve this problem, the draft amendment allows directors who makes a request to jointly call for the meeting and fix the meeting date within 14 days from the date of the request.

In addition, the draft amendment further provides that if the chairman is absent, the deputy chairman can summon the BOD’s meeting.

Section 7. The following provision shall be added as section 81/1 of Public Limited Company Act B.E. 2535:

“Section 81/1. In the case there is no chairperson of the Board of Directors, deputy chairperson shall be the person who summon a meeting of the Board of Directors; in the case, there is no deputy chairperson, at least two directors may jointly summon a meeting of the Board of Directors.”

 
Summoning of Shareholders’ meeting

 

Section 11. The following provision shall be added as section 101/1 of Public Limited Company Act B.E. 2535:

“Section 101/1. In the case shareholders summon a meeting as per section 100 paragraph two, shareholders summoning the meeting may send notice summoning the meeting to shareholders via electronic methods; provided that such shareholders have declared their intention or given consent to the company or the Board of Directors as prescribed in section 7/1.”

Section 100 provides that, apart from the BOD, shareholders are entitled to summon the shareholders’ meeting.

As such, the draft amendment permits shareholders to summon the meeting via electronic means, provided that those recipient shareholders have declared their intentions or given their consent to the company or BOD to receive such letters or documents.

Proxy Appointment

 

 

Section 12. The following provision shall be added as paragraph three of section 102 of Public Limited Company Act B.E. 2535, which was amended by Public Limited Company Act (No. 2) B.E. 2544:

“Appointment of a proxy in paragraph one may be carried out via electronic methods provided that such methods are safe and credible that such appointment has been duly made by a shareholder, according to the criteria stipulated by the Registrar.”

According to Section 102, the procedure for the proxy appointment must be made in hard copy.

 

Under the draft amendment, the proxy appointment can be carried out via electronic means, provided that such means must be safe, reliable and able to verify that the proxy appointment has been duly made by a shareholder.

 

The table above provides only a summary of the draft amendment. If you have any questions or require any additional information, please contact Threenuch Bunruangthaworn, Archaree Suppakrucha of ZICO Law Thailand or the partner you usually deal with.

This alert is for general information only and is not a substitute for legal advice.

[1] Sections 79, 98 and 101 of the Public Limited Company Act B.E. 2535.