Company shares in Thai companies.
There are two types of shares in Thai companies – ordinary and preference shares. While both types grant shareholders rights and duties to the company under the Civil and Commercial Code, their power differs significantly. Below is a breakdown of the two share types and what makes them different:
Holders of ordinary shares – ordinary shareholders – will receive share of any profits in respect to those shares that are 100% paid up (in the form of dividends) and should they sell the shares, their initial investment will be returned. This will also occur if the company falls into liquidation and the assets outweigh any debt or liabilities. Furthermore, having ordinary shares grants shareholders one vote per share.
Preferential shareholders have a couple of tricks up their sleeves. Firstly, possessing this type of shares puts preferential shareholders into a dual position of a shareholder and “debtor.” What this means in practices is that if the company gets liquidated, they get reimbursed before ordinary shareholders do (provided there is money left). Secondly, they are able to receive share of the profits regardless of whether they paid their shares up or not. Moreover, company documents drafted upon registration may increase their voting power at a shareholder meeting from one to ten votes per share.