Shareholder’s rights in Thailand.

Shareholders in a Thai private company that hold a greater percentage of a company’s shares usually have greater rights than shareholders who hold a lesser percentage. Such rights are normally exercised by way of voting at a meeting of shareholders.

The table that follows seeks to demonstrate, in a generalised way, the respective powers of shareholders holding varying percentage of a company’s share capital within the context of voting at a shareholder meeting.

The table assumes that:

  • All shareholders are represented at a meeting
  • The company does not have preference shares with special voting rights
  • The company does not have special articles of association and/or there are no shareholders agreements that grant additional rights to minority shareholders

It is however possible to negotiate for further rights at the time of share acquisition. This is an issue that potential investors should raise with an independent legal advisor such as Interactive Thailand, prior to making any commitment to invest. An example of how small shareholders can obtain greater power (and hence greater protection), would be through amending the articles of association to include a list of matters requiring the approval of a greater proportion of shareholders at a meeting than would otherwise be the case.

Extent of shareholdingNature of controlComments
Shareholders who own more than 75% of the sharesThese shareholders have absolute control over all decisions to be made at the shareholders meetings in accordance with the law, and may pass both ordinary resolutions and special resolutions Special Resolutions are resolutions concerning:

  • Amending the articles of association
  • Amending the memorandum of association
  • Increasing the capital, reduce the capital
  • Passing a resolution to place the company in liquidation
  • Passing a resolution to merge the company with another company
Shareholders who own more than 50% of the shares, but less than 75%These shareholders have the power to pass any ordinary resolutions at shareholders meetings. In other words this shareholder can run the ordinary business of the company on its own.

These shareholders may not pass special resolutions without the agreement of other shareholders.

Shareholders have other rights that are not reliant on the percentage of ownership held, but which are inherent to their shares.

As an example, a shareholder may take legal action against a Director of the company that violates the duties imposed to him by the law.

If the company refuses to takes action against such Director any shareholder may then do so.

Shareholders who own more than 25% of the shares but less that 50%These shareholders have the right to require the company to convene an extraordinary meeting of shareholders, and the right to block special resolutions.
Shareholders who own more than 20% of the shares but less than 25%These shareholders have the right to require the company to convene an extraordinary meeting of shareholders, but may not otherwise influence the decision of the shareholder meeting.
Shareholders who own less than 20% of the sharesThese shareholders may not, by themselves, require the company to convene a shareholder meeting, and may not influence the passing of any special resolution or ordinary resolution.
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