Proposed Amendment to the Public Limited Company Act of Thailand has been Approved by the Senate of Thailand

On 28 February 2022, the Senate of Thailand resolved to approve the draft amendment to the Public Limited Company Act B.E. 2535 (1992) (“PLCA”), a key regulation applied to all public limited companies (“PLC”) in Thailand. This was done in order to update the current provision of the PLCA which may be no longer suitable to present situation, and would be obstacle to operation of the PCL, particularly when the outbreak of COVID-19 caused extensive change to our world.

The draft amendment mainly focuses on recognition of electronic means in communication and undertaking corporate formalities, including but not limited to sending notices, statements or documents to persons involved with the PLC, i.e. shareholders, directors and creditors, as well as the holding of meetings, either at the level of shareholder or director, through electronic means; with the intention to reduce undue burden and facilitate business operations of the PLC to be more flexible and in alignment with current technological advancements.

The draft amendment contains four separate issues, as follows:

1. Allowing the PLC to advertise, publish or send notices, statements or documents to shareholders and other persons by electronic means

Under the current PLCA, the PLC is required to advertise or publish notices and statements relating to its information in a local newspaper for not less than three consecutive days. The draft amendment provides an option for the PLC to publish or advertise the same to persons involved with the PLC, i.e. shareholders, directors and creditors, via electronic means, provided however as follows;

The draft amendment provides an option for the PLC to publish or advertise the same to persons involved with the PLC, i.e. shareholders, directors and creditors, via electronic means, provided however as follows;

• 1. The recipient (i.e. shareholders, directors and creditors) has declared its intention or granted consent thereof to the PLC; and
• 2. The PLC or board of directors complies with the criteria issued by the registrar.

2. Allowing the PLC to hold meetings by electronic means

Board of Directors Meeting

The PLCA is silent on holding a board of directors meeting by electronic means. However, certain PLCs have recently arranged their board of directors meetings electronically by virtue of the Royal Decree on Electronic Meetings B.E. 2020 (2553) (“Royal Decree”). The draft amendment therefore proposes to revise the current provision of the PLCA in order to correspond with the Royal Decree.

In other words, under the draft amendment, the PLC will be allowed to hold a board of directors meeting electronically, to the extent that it must be in accordance with the laws regarding electronic meetings enforced at such time (in this case, the Royal Decree), and where its Articles of Association (“AOA”) does not prohibit it from doing so. In such regard, the draft amendment shall recognise the head office of the PCL to be the place of the board of directors meeting.

It is worth noting that, in addition to relieving restrictions on electronic meeting, the draft amendment also prohibits the board of directors meeting to be physically convened outside Thailand, while the current PLCA is absent on this matter.

General Shareholders Meeting

The PLCA is also silent on whether or not a general shareholders meeting is eligible to be held electronically. The PCL, notwithstanding the provision of the PLCA, is however allowed to hold a general shareholders meeting, either an annual general meeting or extraordinary meeting, under the Royal Decree.

In order to be in accordance with the criteria for the arrangement of a board of directors meeting, the draft amendment further prescribes that the PLC may opt to hold a general shareholders meeting electronically, unless the AOA of such PLC stated otherwise.

The draft amendment further states that the head office of the PLC shall be assumed as the place of the meeting. Moreover, the PLC is also allowed to send an electronic notice to shareholders, summoning a general shareholders meeting, but only if prior approval thereof has been granted by such shareholders.

3. Granting authorisation to summon a board of directors meeting to a director who is not the chairperson

Under the current provisions of the PLCA, the chairperson shall be the sole person who is authorised to summon a board of directors meeting, regardless of whether it is initiated by the chairperson him/herself or at the request of at least two other members of the board of directors. However, the draft amendment grants an option to such two members of the board to mutually summon a meeting by themselves in the event their request has not been responded to by the chairperson, in other words, the chairperson refuses to summon a meeting upon request. However, the draft amendment further regulates that such summoning by two members from the board must be conducted within fourteen days from the date which their request is rejected by the chairperson, and to the extent where there is a reasonable ground or in order to protect rights or benefits of the PLC.

Furthermore, the draft amendment provides an authorisation to vice chairperson to summon the Board of Director Meeting in case the PCL does not have chairperson or the chairperson is absent, or to at least two members of the board to execute the same, when the PLC does not have vice chairperson or the vice chairperson is absent.

The draft amendment also shortens the notice period from seven days to only three days, while the shorter notice period is still available for emergency cases.

4. Allowing a proxy appointment to be executed electronically

There is also a revision on the method of execution of a proxy appointment for shareholders who do not wish to attend the general shareholders meeting in person; the original provision of the PLCA accepts only a hard copy but the new criteria states that the proxy appointment can be executed electronically, provided however that such method of execution is safe and credible that such appointment has been duly made by a shareholder whose name is affixed therein.

Please note that the draft amendment has been submitted for the final stage of preparation and will be further published in the Royal Thai Government Gazette thereafter for the sake of enforcement.

This is intended merely to provide a regulatory overview and not to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contact:

Nuttaros Tangprasitti
Partner

Kewalin Tiyajamorn
Attorney-at-Law