On 9th of June 2020, the Cabinet approved a bill for the amendment of the Civil and Commercial Code, amending some provisions regarding the place to apply the application for registration of the partnership or company, the power to reduce and waive the fees for registration or requesting the copies of document and the use of technology in the board meeting. H&P lawyers in Thailand have prepared a brief summary on the main issues of these amendments as follow:
1. The registration of the partnership or company shall be summitted at any branch of the Department of Business Development. As prescribed by the Minister, the Announcement of the National Council for Peace and Order No. 21/2560 (2017), Re: On Amendments of Laws to Facilitate the Ease of Doing Business, was issued to amend section 1016 of Civil and Commercial Code as follow;
“Registration of partnerships and companies, any alterations subsequently made in the registered particulars, and any other matter required to be registered by the provisions under Title 22 Partnerships and Companies, shall be made to the Registrar at the Office of the Company Limited and Partnership Registration as determined by an announcement issued by the competent Minister.”
This amendment allows the registration to be submitted at any branch, different from the previous version that limited to the branch where the head office of the partnership or company is situated. Since the Order No. 21/2560(2017) allows the registration to be submitted at any branch office of the Department of Business Development, this amendment, therefore, does not change the place for submitting the application.
2. The Minister shall have the power to reduce or exempt the fees of the registration, requesting a document review, requesting the copy of document with certification, and any fees related to the partnership and company. The Announcement of the National Council for Peace and Order No. 21/2560 (2017) was issued to amend section 1020/1 of the Civil and Commercial Code as follows;
“The component Minister shall have the power to issue Ministerial Regulations to reduce or exempt the fees under Section 1018 and Section 1020”
3. The registered memorandum shall expire, if the company registration is not made within three years. Below is the current version of section 1099;
“Section 1099 The memorandum must be made in two original copies at least and signed by the promoters, and the signatures shall be certified by two witnesses.
One of the copies of the memorandum must be deposited and registered at the Registration office of that part of the Kingdom in which the registered office of the company is declared to be situated.”
As this section does not specify the expiration date of the registered memorandum, it prevent any person to use the same name to register the company as the registration of memorandum shall be deemed as the name’s reservation. This could be the problem when the applicant who submits the memorandum registration, but disappear or abandon to register the company afterward. This amendment will solve this problem by providing the period of expiration.
4. The Order No. 21/2560 removed the requirement of share certificate to bear the seal of company. The previous version before the Order No. 21/2560 was as follow;
“Section 1128 Every certificate of shares shall be signed by one of the directors at least and shall bear the seal of the company
It must contain the following particulars:
(1) The name of the company.
(2) The numbers of the shares to which it applies.
(3) The amount of each share.
(4) In the case, the shares are not fully paid up, the amount paid on each share.
(5) The name of the shareholder or a statement that the certificate is to bearer.”
The terms “Shall bear the seal of the company” was removed by the Order No. 21/2560. This amendment will return those terms to section 1128 with the additional conditions which is “ and shall bear the seal of the company only if the company has a stamp.
5. The board meetings may be conducted by communicating through any technology. The appearance of the director at the meeting will be not necessary, except if the regular one is not permitted to be conducted by communicating with technology. The meeting must be in accordance with the rules, procedures, and conditions prescribed in the Ministerial Regulations. It shall be deemed that the participants using communication with this method, have joined the board meeting and to be counted as quorum as well as entitled to vote at the meeting. The amendment will promote the use of technology for the meeting. However, the Ministerial Regulations shall have some condition and further regulations to before making this amendment.
6. The notification to call the board meeting can be send by Postal service, except the the company having the certificate to bearer share which must publish in a local newspaper as usual. This is the amendment on section 1175, which the current version is as follows;
“Section 1175 A notice summoning every general meeting shall be published at least once in a local paper not later than seven days before the date fixed for the meeting, and sent, by post with acknowledgment of receipt thereof, to every shareholder whose name appears in the company’s register of shareholders not later than seven days before the date fixed for the meeting, save that, in the case of a notice summoning a general meeting for passing a special resolution, such acts must be performed not later than fourteen days before the date fixed for the meeting.
The notice summoning a general meeting shall specify the place, date and time of the meeting and the nature of the business to be transacted; and, in the case of the notice summoning a general meeting for passing a special resolution, such notice shall also specify the matters to be proposed for passing the resolution.”
This amendment will reduce the expenses of the company to publish in a local newspaper because it will not necessary and postal service is enough to notify the shareholder.
7. The bill has the transitional provisions in the case that the memorandum was registered before this amendment will be effective. The promoter who have registered the memorandum for over three years but not register the company yet, can register the company within 180 days since the amendment Act effective as provided by section 4.
If you need more clarifications of these legal updates of company set up in Thailand and compliance, please contact our lawyers in Bangkok at [email protected]
