How does the amendment of the Civil and Commercial Code of Thailand effect the holding of an annual general meeting?

In Thailand, March and April is a critical time for many businesses in Thailand because this is the designated time for holding the annual general meeting (“AGM”) for a limited company whose fiscal year ends on December 31. However, the amendment of the Civil and Commercial Code (“CCC”), which has been in effect since 7 February 2023, has led to significant changes in the procedure and approach for the holding of a shareholders meeting, including an AGM, for a private limited company (“Company”). Consequently, a Company may have to change its traditional practice in order to align with the amendment of the CCC.

In order to facilitate a Company in holding its AGM this year, we have provided a summary of the new guidelines outlined in the latest amendment of the CCC below:

Calling for an AGM

Previously, according to the CCC, a Company had to publish a notice summoning its AGM at least once in a local newspaper and mail it to every shareholder listed in the Company register by no later than seven days prior to the meeting date (or 14 days for special resolutions). However, with the recent amendment to the CCC, this publication requirement is no longer necessary, except in cases where a Company has a shareholder holding a bearer certificate. In such cases, the notice must be publicised either once in a local newspaper or via electronic media within the same seven-day period. 

However, in many cases, a Company may still have its registered Articles of Association ("AOA") which requires the publication of a notice summoning the AGM, and may not have yet updated its AOA to reflect the recent amendment. Consequently, it may be necessary to consider whether or not such Company is still required to comply with the publication requirement.

The Department of Business Development (“DBD”) has issued an explanation titled "Practice Guideline for Sending Invitation Notice to a Limited Company Shareholders Meeting under Section 1175 of the Amended CCC" in January 2023. According to the content of this guideline, only limited companies whose AOA does not require the publication of the notice convening the meeting are exempt from this obligation. If a Company's AOA contains a regulation requiring the publication of a notice summoning the AGM in a local newspaper, as was required under the old law, such regulation would still be in effect even after the amendment takes effect on 7 February 2023. Such Company must follow the procedure specified in its AOA. If the Company wishes to stop publishing the notice summoning the AGM in the local newspaper in the future, it must amend its AOA accordingly.

We reiterate that under the amended CCC, a Company is exempted from publishing a notice convening the AGM only if it does not have any shareholders holding bearer certificates. However, a Company is still obligated to send notices to all shareholders as before, either by registered mail (Section 1175 of the CCC) or by hand (Section 1244 of the CCC ), provided that the AOA allows the Company to do so. It should be noted that sending notices by e-mail is not acceptable, unless the Company arranges for the e-meeting under the Royal Decree on Electronic Meetings B.E. 2553 (2020) (“Royal Decree”).

Quorum of the AGM

Previously, the CCC stated that if there were no shareholders representing at least one-quarter of a Company's capital present at a meeting, the meeting could not conduct any business discussion, However, it was not clear whether or not only one shareholder in attendance was sufficient to form a quorum. Therefore, a court decision rendered the precedent decision to interpret that only one shareholder cannot form a quorum, even if he/she holds more than twenty five percent of shares.

However, Section 1178 of the amended CCC  clearly specifies that a quorum of any meeting must be composed of at least two shareholders or proxies attending the meeting and holding shares in aggregate of not less than one-quarter of a Company's capital. If this requirement is not met, the quorum cannot be constituted to vote on any matter.

Electronic meeting

The previous CCC does not address e-meetings, but they are permitted under Royal Decree. According to Section 6 of the Royal Decree , a Company is allowed to hold its AGM via electronic media, provided that the Company’s AOA does not prohibit it from doing so. However, in organising the e-meeting, the Royal Decree may require the whole process to be conducted electronically, including the sending of an invitation notice and other documents related to the e-meeting. This means that the Company is not obliged to send an invitation notice to shareholders via registered mail pursuant to Section 1175 of the CCC. Instead, it may send such notice to shareholders by electronic means. Notwithstanding, it should be noted that the period of performance under Section 1175 of the CCC still applies to this practice.

Likewise, Section 1162/1 of the amended CCC  allows for electronic meetings of boards of directors, subject to the provisions of the Royal Decree and the AOA. 

It is noteworthy that the provisions of the amended CCC do not apply to the holding of shareholder meetings by public limited companies, because the procedures for conducting meetings for public limited companies are governed by the Public Limited Company Act B.E. 2535 (1992). 

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 the following:

Nuttaros Tangprasitti
Partner 

Kewalin Tiyajamorn
Associate(Attorney-at-Law)