Thailand: Recent Changes to the Civil and Commercial Code

On November 8, 2022, the Royal Gazette announced the enactment of the Act amending the Civil and Commercial Code (No.23) B.E. 2565 (A.D. 2022). This amendment introduces the following key modifications:

• Reduction of the minimum number of shareholders and promoters from three persons to two persons (Section 1097 and 1237(4)).
• Shortening the validity period of Memorandums of Association from 10 years to 3 years after the registration of the Memorandum of Association before company formation (Section 1099).
• Requirement for the company’s share certificate to be signed by at least one director and affixed with the company’s seal (if applicable) (Section 1128).
• Additional criteria for electronic meetings (Section 1162/1).
• Relaxation of the requirement for submitting a notice of shareholders’ meeting, reducing the process from (i) publishing the notice in a newspaper and (ii) submitting the registered e-mail to each shareholder to only submitting the registered e-mail. Publication in a newspaper or online media will be required only if the company issues bearer share certificates (Section 1175).
• Imposition of a minimum number of proxies and/or shareholders, requiring at least two persons (Section 1178).
• Introduction of a completion date for dividend payment, no less than 1 month from the date of shareholders’ or directors’ meeting, deviating from the previous provision that only specified the duration of dividend payment (Section 1201).

In addition to the above, provisions related to mergers have been further amended, introducing a new process and addressing key issues, including:

• Types of mergers, specify an amalgamation by (i) establishing a new entity and dissolving the amalgamating companies or (ii) having one of the amalgamating companies retain an entity while the others merge (Section 1238).
• Resolution in case of shareholder objections to the merger (Section 1239/1).
• Merger notification and the duration for objections to the merger by the company’s debtors. Failure to resolve objections through repayment or providing security on obligations will prohibit the merger (Section 1240).
• Post-merger agendas such as the company’s name, objectives, share allocation, and names of directors and accountants (Section 1240/1).
• Date for the handover of business, properties, accounts, documents, and other evidence within 7 days after the shareholders’ meeting on the merger (Section 1240/3).

The effective date of these amendments is February 7, 2023, and all companies in Thailand must ensure compliance.