Articles of Association are mandatory for the Thailand Company Registration process. It is one of the key documents without which it is impossible to establish a Thai Limited Company.
The statutory meeting decides the content of the articles of association, a crucial corporate document required for all Thai companies. Let’s find out more about Thailand’s articles of association.
What are the Articles of Association?
The articles of association is a document that concerns the company’s objectives and regulations for its operations.
Provisions included in the Articles of Association
Thai private limited companies may choose to either adopt their own articles of association. Additionally, they can refer to the relevant provisions of the Thai Civil and Commercial Code.
The CHAPTERS are as follows:
Chapter 1: General provision
- The provisions of the Thai Civil and Commercial Code concerning private limited companies shall apply in all respects.
- According to the law, the amendment or modification of the articles of association must refer to the shareholders’ meeting.
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Chapter 2: Shares and shareholders
- Mentions of the types of shares must be in the name certificate, and the shares must be fully paid-up. At least one director must sign every certificate of shares and bear the company seal.
- The transfer of shares must must have document proof. Additionally, the transferor and transferee must sign it in the presence and consent of at least one witness.
- The transfer of shares is valid when the company registers the transfer.
- The company cannot own its own shares or take them in pledge.
Chapter 3: Directors
- The general meeting of shareholders normally decides and fixes the number and remuneration of Directors for the Board.
- The Directors must fulfill any vacancy requirement in the board of directors. Any person appointed shall retain their office for such duration only as the vacating director was entitled.
- The director may fix the quorum necessary for the transaction of business at their meetings. In case of failure, the quorum shall be three when the number of directors exceed three.
- The board of directors is responsible for the company’s management.
Chapter 4: Shareholders’ meeting
- The general meeting of shareholder shall be held within six months after the company registration, and held at least every 12 months. This meeting is called an ordinary meeting. Whereas, other general meetings are called extraordinary meetings.
- Directors may summon an extraordinary meeting whenever they think is suitable. However, he/she may also do so in response to a request made in writing by shareholders. Moreover, the requesting shareholders must hold one-fifth of the shares or more.
- Any shareholders unable to attend the meeting may vote by proxy, if the proxy is in writing.
- The chairman of the board of directors shall preside at every general meeting of shareholders. If there is no chairman or the chairman is not present within 15 minutes after the appointed time of holding the meeting, the shareholders may elect one of their members to be the chairman.
- A general meeting may not transact any business unless shareholders representing at least one-fourth of the company’ capital are present. However, the meeting faces dissolution, if the minimum shareholders do not arrive within an hour of commencement time.
Chapter 5: Balance sheet
- The Company must prepare the balance sheet containing a summary of the company’s assets and liabilities and a profit and loss account at least once every financial year from 1 January to 31 December.
- At least one auditor examine the balance sheet and submit at the general meeting for approval within four months.
Chapter 6: Dividend and reserve funds
- The distribution of dividends must be in proportion to the amount payable upon each share.
- The company must place in a reserve fund at the time of distribution of dividends, at least one-twentieth of the profits arising from the company’s business, until the reserve fund reaches one-tenth part of the capital of the company or such higher proportion thereof.
Conclusion
Companies in Thailand must draft their articles of association at the Statutory Meeting when establishing the company to outline its operations and aims.
Do not hesitate to contact Konrad Legal for guidance on your company’s articles of association or the process of setting up a company in Thailand.
