Shareholder meetings are a compliance requirement for companies in Thailand, and are held to address the company’s performance or issues to be approved. This guide provides an overview of the types of shareholders in a Thailand company.
There are two types of shareholder meetings in Thailand, which are:
- General meeting of shareholders
- Extraordinary shareholder meeting
General meeting of shareholders
When is the general meeting held?
According to the Thai Civil and Commercial Code, the company’s first general meeting is held within six months after the company is incorporated. The following general meetings should be held once a year.
What matters are discussed at the general meeting?
Some of the matters that are discussed at a general meeting are:
- Approval of the minutes of the previous ordinary shareholder meeting
- Report the company’s activities during the past year
- Appoint new directors to replace directors who will be terminated
- Approve the company’s balance sheets and profit and loss statements
- Decide on dividend payments
- Appoint of auditor and remuneration
Notice of the general meeting
The notice of the general meeting must be published in a local newspaper no more than seven days before the date of the meeting.
Notice shall also be sent by registered post to shareholders whose names are listed in the register of shareholders seven days before the meeting, or if the notice is for a special resolution, the notice should be sent 14 days before the general meeting.
The notice of the meeting should include:
- Location of the meeting
- Date and time of the meeting
- Nature of the business to be carried out
- Details of the proposed special resolution if the notice is for a special resolution to be made in the meeting
Quorum requirements for the general meeting
The general meeting can only be held if shareholders representing at least one-fourth of the company’s capital are present.
If the meeting was summoned upon the requisition of shareholders and the required quorum are not present within an hour from the appointment time of the meeting, it will be dismissed.
If the general meeting was not summoned upon the requisition of shareholders, another general meeting must be held within 14 days, and no quorum is required.
Chairman of the general meeting
According to section 1180 of the TCCC, the chairman of the board of directors shall preside at every general meeting of shareholders.
If there is no chairman or he is not present within 15 minutes of the appointed time, the shareholders may elect one of their members to be the chairman.
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Extraordinary shareholder meeting
Extraordinary shareholder meetings are only held when an urgent issue has occurred, and the shareholders need to be held to approve any changes.
What issues are discussed at the extraordinary shareholder meeting?
Matters that are decided at an extraordinary shareholder meeting include:
- Changing company directors
- Amending the company’s articles of association
Who can call an extraordinary shareholder meeting?
According to section 1172, directors may call for an extraordinary meeting when appropriate. Directors must summon the meeting immediately when the company has lost half of the amount of its capital to inform shareholders of the loss.
Extraordinary meetings may also be summoned if shareholders holding not less than one-fifth of the company’s shares call for a meeting in writing.
When shareholders call for a meeting, the directors must, without delay, summon the meeting. If the extraordinary meeting is not held within 30 days, shareholders holding the required amount of company shares may summon it themselves.
Voting by proxy at shareholder meetings
Shareholders may vote by proxy, and shareholders are required to appoint a proxy in writing.
To appoint a proxy, the following information must be included in the notice:
- Number of shares held by the shareholder
- Name of the proxy
- Meeting(s) which the proxy is appointed
The notice must also be dated and signed by the shareholder.
There are two types of shareholders’ resolutions: an ordinary resolution and a special resolution.
An ordinary resolution is applied in any shareholder meeting. On the other hand, special resolutions are required by the law.
The following actions require a special resolution by law:
- Amending the Memorandum of Association or Articles of Association
- Increasing the capital by issuing new shares
- Decreasing capital
- Dissolving or merging the company
Thai companies require two types of shareholder meetings: the general shareholder meeting held once a year to discuss matters that need approval regarding the company and the extraordinary shareholder meeting held as soon as possible to discuss urgent matters. If you need any advice on operating a business in Thailand, do not hesitate to contact Acclime.