On 18 August 2009, the Thai Cabinet approved a draft amendment (the Draft) to the Civil and Commercial Code (the CCC) designed to simplify company registration procedures and alleviate problems faced by private limited companies which evolved as a result of certain amendments made to the CCC in 2008.
Please click here for a full summary of the Draft provisions.
The Draft was proposed by the Ministry of Commerce (the MOC) after several companies had complained that the new requirements implemented in 2008 were inconvenient, time-consuming and burdensome.
Companies objected to, amongst other things the requirement that notices for annual general meetings be published in a local newspaper; the proscription on circular resolutions and proxies for board meetings; and the restriction on the Partnerships and Companies Registration Offices at which new companies could register.
Material Contents of the Draft
The MOC's subsequent Draft takes into account these arguments as well as the MOC's view that certain provisions of the CCC are outdated because they do not support the use of current technologies.
- Companies and partnerships may be registered at any Partnerships and Companies Registration Office which is ready to carry out the registration as stipulated in the Minister's notification;
- The Commerce Minister will be empowered to exempt fees for registration, document inspection, requests for certificates, and requests for copies of certified company affidavits;
- A registered memorandum of association will become invalid if the entity is not incorporated as a limited company within ten years;
- Directors will be allowed to attend board of directors meetings via communication technology; and
- Convening notices of the annual general meeting need only be delivered to all shareholders by registered reply mail. Publication of the notice in a local newspaper will no longer be required except in the case of companies issuing bearer shares.
The Draft, if adopted, will provide considerably more flexibility and convenience to private businesses. Moreover, with fewer administrative obstacles and greater use of technology, Thailand's private sector growth and competitiveness will also be encouraged.