Are you planning to start a business in Thailand? If you are from Thailand, then, apart from the requirement of a Thai partner, as in the case of foreign investors, the entire process of company registration is the same for all. Just like company name reservation, drafting of MoA/AoA/MoU, and tax registration, Statutory Meeting is very crucial for Company Registration in Thailand.
Name Reservation for Company Registration in Thailand is the first stage of the process, you have to convene a Statutory Meeting just after this on finalization of the Memorandum of Association (MoA) or AoA or MoU, as applicable. This article aims to guide you throughout the process of convening the Statutory Meeting to register your company in Thailand.
What is a Statutory Meeting for Company Registration in Thailand?
A Statutory Meeting is a meeting that must be held within 30 days of the incorporation of a company in Thailand. The meeting must be attended by at least two-thirds of the directors of the company, and the following items must be discussed and approved:
- Appointment of the first auditor of the company
- Adoption of the initial financial statements of the company
- Distribution of the initial profits of the company
You have to file the minutes of the Statutory Meeting with the Department of Business Development within 15 days of the meeting on a mandate.
What Makes Statutory Meetings for Company Registration in Thailand so important?
A Statutory Meeting, also known as the First Annual General Meeting, is an important step in the process of registering a company in Thailand. Here are some reasons why the Statutory Meeting is important for company registration in Thailand:
It is a Legal Requirement!
The Statutory Meeting is a mandatory requirement under Thai company law. You have to convene this within one month from the date of company registration for private limited companies and within three months for public limited companies. Failure to hold this meeting within the prescribed time frame can result in penalties or consequences for the company’s legal status.
Ensures the Compliance of Key Documents
During the Statutory Meeting, shareholders must approve important documents and information, such as the company’s Articles of Association, the appointment of directors and auditors, and the capital structure. Nonetheless, this ensures that the company’s foundational documents are in order and compliant with Thai corporate regulations.
Confirms Company Ownership Structure
The Statutory Meeting allows the company to confirm the identity and shareholdings of its initial shareholders. This helps maintain transparency and accountability in the company’s ownership structure.
Establish the Financial Reporting Structure & Operations of the Company
The company’s financial statements, including the balance sheet and income statement, are presented and approved during the Statutory Meeting. Shareholders have the opportunity to review the company’s financial performance and its financial health. This provides transparency and accountability to shareholders and allows them to assess the company’s progress. The meeting also helps in ascertaining whether your financial reporting complies with Thai Financial Reporting Standards or not.
What Exactly Happens in a Statutory Meeting for Company Registration in Thailand?
Please note that a Statutory Meeting is possible only after the finalization of shareholders or the share structure. Once done, the following are the major activities conducted during a statutory meeting:
- Acceptance of the Association’s Articles (by-laws).
- Approval of all agreements made and costs paid by the promoters to publicize the business.
- Deciding on the compensation, if any, applicable for the promoters.
- Determining the type and quantity of preference rights that will accrue to them, as well as the issuance of preference shares, if any.
- Determining the number of common shares or preference shares for distribution as fully or partially paid-up, if not in cash, and the maximum level at which such shares will be deemed paid-up.
- Appointing the initial auditor(s) and director(s), as well as defining each director’s authority.
After completing the statutory meeting successfully, the promoters must hand over the businesses and company operations to the directors.
Consult a Corporate Law Firm for a Statutory Meeting in Thailand
It is always wise to have corporate law support by your side while conveying the Statutory Meeting. Although you need support from the beginning, yet, your association with a corporate law firm in Thailand can help you in the following ways:
- Easing the Process of Company Name reservation in Thailand
- Drafting the Memorandum of Association, Shareholder’s Agreement, Article of Association
- Convenience in Company Registration Applications at the Department of Business Development of Thailand
- Drafting of Appointment Letters for Directors, Shareholders (if required) and Auditors
- Proper documentation of the Minutes of the Statutory Meeting
Additionally, if the corporate law firm has expertise in accounting, taxation, and payroll management, you can get extra benefits. Such firms can finalize your accounting and financial reporting structure. Furthermore, they can do your daily accounting by relieving you from hiring an accounting, taxation, or payroll management team. To avail of all the benefits, email us your requirements at [email protected]. Our team will get back to you within one Thai working day.
