Section 44 Orders Strengthen Minority Shareholder Rights
On 4 April 2017, the National Council for Peace and Order issued Order No. 21/2017 under Section 44 of the Interim Constitution to strengthen minority shareholder rights. The order endeavours to make doing business in Thailand easier by relaxing the rules in some areas and strengthening rights in others.
Here are some highlights of these changes:
Establishing and dissolving a company
The Civil and Commercial Code was amended so that:
- A company can now be registered at any district office in the country. Previous, registration could only take place at the district office of the company’s main location.
- Although every share certificate must be signed by at least one company director, each certificate is not required to be stamped with the company seal.
- Dissolving a limited company through the courts can now occur if there is just reason causing the company’s continued operations to be impossible.
Minority shareholder rights
The Public Limited Companies Act was amended to protect minority shareholders by:
- Reducing shareholding required to call an extraordinary shareholders meeting. Now, shareholders holding at least 10% (previously it was 20%) of total shares sold can request the board of directors call an extraordinary shareholders meeting at any time.
- Reducing shareholding required to inspect company records. Now, shareholders holding at least 5% (previously it was 20%) of issued shares can submit a written request to the Registrar to arrange an inspection of corporate affairs, financial status, and board of directors operations.
To find out more about these changes, as well as changes to the bankruptcy and social security regulations, please contact us.