The Public Limited Companies Act (No. 4) B.E. 2565 (2022) was approved by the Government and published in the Government Gazette on May 23, 2022 in Thailand. The new law modifies the previous version of the Public Limited Businesses Act. It does so by allowing electronic Board of Directors (BOD) and shareholder meetings. Additionally, it is changing the corporate approval processes for public limited companies.
The new act took effect the day after it was published. However, full implementation of this will not be possible until the issue of several relevant sub rules and sub regulations. This article covers the essential features of the new law.
Electronic Dissemination of Company Notices & Advertisements
Company notices, statements, and advertising were required to be published in a local newspaper in company’s locality. This was mandatory for at least three consecutive days under the prior version of the Public Limited Companies Act.
Whereas, the modified statute, permits for electronic delivery of such notices, statements, and advertisements. However, the process must adhere to sub regulations published by the Department of Business Development (DBD).
Electronic Delivery Options for Documents
The modified statute allows issue of public limited company notices and papers electronically. It is contrary to the previous practice of issuance by registered mail. Moreover, this mode is applicable for company directors, shareholders, or creditors, as long as the recipients have given their consent. However, the company must follow the sub regulations of the DBD when delivering papers electronically.
Authorization to Individuals to call BOD Meetings
This amendment gives the Chairperson of the Board of Directors the authority to conduct a board meeting. Additionally, it also allows any two directors to jointly request that the chairperson call a meeting. In this case, the chairperson must call the meeting within 14 days. The new act further states that if the chairperson fails to conduct the meeting on the request within 14-day, the seeking directors can call a BOD meeting themselves within the next 14 days. If there is no chairperson, the new statute empowers the vice-chairperson to convene a BOD meeting; if there is no vice-chairperson, this ability passes to any two directors.
Board of Directors Meeting – Electronic Mode
The new Public Limited Companies Act allows convening BOD meetings through electronic means. However, this is not possible if the company’s articles of association forbid it. These meetings, which should take place at the company’s headquarters, must follow the legislation governing electronic meetings.
The Board of Directors of a public limited corporation shall meet at least once every three months. The previous version of the Act mandates the circulation of the meeting notice to the directors in person. It was also possible by mail at least seven days before the meeting. However, the new act shortens the notice time to three days. The Board can shorten the notice period further in the event of an emergency. Moreover, it will be possible to protect the company’s rights and benefits, and the company can send the notification online.
Shareholders’ Meetings in Electronic Mode
Similar to electronic BOD meetings, directors can hold shareholders meetings electronically. However, this will be possible only if the company’s articles of organization do not prohibit it. For this, the company must follow the regulations governing electronic meetings. Similarly, the company headquarters must host the meetings.
If the holders of at least 10% of the total shares request a shareholders meeting and the BOD fails to call the meeting within 45 days of receiving the request, the requesting shareholders might call a shareholders meeting within the next 45 days. If the shareholders agrees to receive the documents online, issuance of the meeting notice electronically will be lawfully possible. The DBD will issue sub regulations that companies must follow while delivering documents.
Proxy Holder Appointment via Electronic Means
The act after amendment allows shareholders to appoint a proxy holder by electronic methods. This is legit as long as the technique is secure, reputable, and follows the DBD’s guidelines. This is a modification from the prior version of the act, which required the grantor to name a proxy holder for a shareholder meeting in writing and sign it, with a hard copy sent to the chairman or a designee.
Konrad Legal will continue to track the new act’s implementation, notably the creation of regulations governing electronic processes, and will offer updates as needed. Please contact us at [email protected] for additional information on these new rules or any element of how public limited companies can comply with Thailand’s laws. If you are planning to register a company in Thailand, you may avail our free online consultation facility available weekdays (Mon-Fri) from 10 AM – 5 PM (Bangkok Time).
