Law on private limited companies
In recent years there have been a number of changes to the laws applicable to private limited companies. The current provisions on private limited companies in the Civil and Commercial Code have been in place since July 2008. In March 2011 the latest changes to the regulations of the Ministry of Commerce on registration of private limited companies became effective.
As of July 2008, a private limited company can be registered with only three shareholders and such registration can be made with a single filing. Under the previous law, registration required seven shareholders and had to be completed in two stages - registration of the memorandum of association first, followed by registration of the company incorporation seven days later.
To call a shareholders' meeting, private limited companies must publish notification in a newspaper and notify all shareholders by registered mail:
- at least seven days before the meeting when passing a normal resolution; and
- at least 14 days before the meeting when passing a special resolution.
A special resolution is required for matters such as an increase of the registered capital, change of name or liquidation and must be passed at a shareholders' meeting at which 75% of the shares are represented. In the past, passing such resolutions required two shareholders' meetings 14 days' apart.
Before July 2008, a creditor of the private limited company had three months following notification in which to object to a decrease in the company's registered capital. This objection period is now reduced to one month. For a merger of companies, the objection period has also been shortened from six months to two months.
In the past, liquidation of a private limited company was required to be published in a newspaper at least twice. It can now be published only once.
In March 2011 the Central Office of Partnerships and Companies at the Department of Business Development of the Ministry of Commerce issued regulations detailing new requirements for the applications and documents that must be filed with the department in respect of private limited companies.
The application form for registration of a company with the department now includes requests for a tax identification number and a social security number for the company. In the past, this information had to be submitted as two separate requests, filed with the Revenue Office and the Social Security Office respectively, once the company had been registered. These separate requests are no longer necessary.
Copies of documents in support of an application for incorporation or registration of a change to the registration particulars of the company (eg, copies of identification documents and passports) must now be signed by the holder or owner of the documents and by the promoter or director that signs the application. The promoter or director can then certify that the copies of such documents are true copies of their originals.
Before March 2011 a director could sign applications for incorporation or registration of a change to the registration particulars of a company outside Thailand without notarisation. Under the new regulations and practices of the department, notarisation is required for such signatures.
For further information on this topic please contact Kowit Somwaiya or Naddaporn Suwanvajukkasikij at LawPlus Ltd by telephone (+66 2 636 0662), fax (+66 2 636 0663) or email ([email protected] or [email protected]).