Thai Limited Companies: Shareholder Meetings
Shareholder meetings are an important element in the management of Thai limited companies, since the authorized directors of the company must manage the company under the control of the meetings of the shareholders. In order to hold a meeting of the shareholders, a meeting has to be called according to the procedure defined in the Civil and Commercial Code. One of the procedures according to the Code is that a notification must be delivered to the shareholders.
Section 1175 paragraph one requires that an advertisement must be published in a local newspaper at least once before the date of the meeting no less than 7 days in advance and a notification must be sent by post with acknowledgment of receipt to all shareholders whose name appears in the shareholder registry no less than 7 days in advance of the date of meeting. However, for extraordinary meetings of the shareholders, the aforementioned procedure must be performed no less than 14 days in advance of the date of the meeting.
According to Section 1244, a notification shall be deemed to be delivered to a shareholder if it is delivered to him personally. Furthermore, if the notification has been delivered to the address of the shareholder that appears in the shareholder registry, the shareholder shall be deemed to have been duly notified.
According to Thai Supreme Court Decision No. 384/2506: “Section 1175 of the Civil and Commercial Code regarding notifications of a general meeting of the company only requires that a notification of the meeting be sent no less than 7 days. Therefore, where the Defendant, who is a company liquidator, has sent a notification by post no less than 7 days in advance of the meeting and Plaintiff, who is a shareholder, has received it, then it shall be deemed that Defendant delivered the notice correctly according to the law and it is not relevant as to what day Plaintiff actually received it.”
Furthermore, Section 1175 paragraph two requires that the time and location of the meeting be indicated in the notification, as well as the agenda for the meeting. If a special resolution is to be considered, then the substance of the resolution must be included in the notice.
According to Thai Supreme Court Decision No. 2644/2520 “a general meeting wherein a matter is considered outside of the agenda, a resolution passed by the shareholders to pay a debt which the shareholders themselves are the creditor and have a personal interest violates Section 1174 and 1175.”
Thai corporate law is complex. Foreigners who are in charge of managing a Thai limited company are advised to consult with competent Thailand lawyers.