Company shareholders play an important role in the business and therefore, in Thai Limited Companies too. Shareholders who own a larger percentage of the company’s stock have more rights than shareholders who own a smaller percentage of the stock.
Are you thinking about going in partnership with a Thai Limited Company? Let’s learn more about the rights and responsibilities of shareholders.
Who is a shareholder?
A shareholder is a person, an entity, or an organization holding single or several shares in a company.
In Thailand, a company must have three or more shareholders.
Foreigners can own 100% of a private limited corporation. Foreigners can only own a maximum of 49 percent of activities that require Thai people under the Foreign Business Act.
By acquiring a Foreign Business License, BOI promotion, or registering through the Treaty of Amity, which is only for US residents, foreigners can acquire a majority or 100 percent of a company.
What are the rights of a Shareholder?
In Thailand, a company’s shareholders have the following rights:
- To be paid dividends.
- To request that an extraordinary shareholder meeting be called.
- Keep track of the company’s transactions.
- The ability to sue for compensation.
Shareholders have the right to:
- Access adequate business information to assist in decision-making at every shareholder meeting.
- Attend and vote on each item on the agenda.
- Directors are appointed and removed.
- Nominate auditors.
- Directors should be nominated.
- The corporation should provide them with information about their own shares.
Voting rights of Shareholders
The amount of shares a shareholder owns determines his or her voting rights. The following are the shareholders’ rights to vote on a resolution:
- Shareholders who own more than 75% of the voting rights have complete influence over all decisions made at shareholders’ meetings and have the ability to pass ordinary and special resolutions. These can include raising or lowering capital, altering the articles of association or memorandum of association, or approving a resolution to dissolve or merge the firm.
- A shareholder with more than 50% of the voting rights can pass ordinary resolutions. But the same with less than 75%, whereas extraordinary resolutions require the consent of other shareholders.
- Shareholders who own more than 25% but less than 50% of the firm have the right to call an extraordinary meeting and the ability to vote down special resolutions.
- Shareholders with 20-25 percent of the voting rights have the authority to call an extraordinary meeting of the board of directors, but they cannot influence the outcome.
- The shareholders who possess less than 20% of the firm’s stock cannot force the company to call a shareholders’ meeting or influence the passage of any special or regular resolution.
Register of Shareholders
Every limited business must keep a shareholder registry in compliance with the Civil and Commercial Code’s requirements:
- The shareholders’ names and addresses, as well as their occupations, if any, a declaration of the shares held by each shareholder, identifying each share by its number, and the amount paid or agreed to be considered paid on each shareholder’s shares.
- The date on which each person became a shareholder in the company’s books.
- The date on which each shareholder’s interest in the company ceased to exist.
- The bearer’s certificate numbers and dates, as well as the respective numbers of shares, are in each certificate.
- The date of cancellation of any name certificate or certificate bearer.
Rights and Protection of Minority Shareholders in Thailand
Who are Minority Shareholders?
Minority shareholders possess less than half of the company’s shares and have no voting rights.
Rights of Minority Shareholders
The following are the rights of minority shareholders:
- Submit a motion to the court to have any resolution made at erroneous general meetings revoked.
- To receive notification of the shareholders’ meeting at least seven days prior to the meeting, or 14 days prior to a special resolution.
- Submission of a written request to the board of directors to summon a shareholders’ meeting.
- To ask the competent official to appoint an inspector to look into the company’s operations.
Can a Foreigner use Nominee Shareholders?
Thai nationals have no limits when it comes to using nominee shareholders. The Foreign Business Act, however, prohibits foreigners from using nominee shareholders in a Thai corporation.
There is an imposition of a fine of THB 100,000 to THB 1 million if a Thai national or legal person serves as a nominee shareholder.
To ensure that you have a thorough grasp of the responsibilities of a shareholder in Thailand, it is essential that you use services like Konrad Legal. Mail us at [email protected] for more information and guidelines.
