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Amendments to the Public Limited Companies Act
A Step Toward Thailand 4.0
The COVID-19 pandemic has led to several changes in
people’s lives, including how they run their businesses. Due to the lockdown orders
and social distancing measures resulting from the COVID-19 pandemic,
companies, including public companies, had to adopt electronic means to hold
their annual general shareholders meetings, as those meetings are required to
be held within a prescribed time frame under applicable law.
The Emergency Decree on Electronic Meetings B.E. 2563
(2020) (the “Decree”) was implemented in April 2020,
and provides some level of certainty that any meeting required to be
held by law can be carried out via an electronic form of media that allows
the participants to have discussions and exchange opinions in real-time. The
Decree specifies the security standards that must be followed in order that a
so-called e-meeting can be recognized as evidence in court proceedings.
Recently, the Public Limited Companies Act B.E. 2535 (1992)
(the “PLCA”) was amended, with effect from 24 May 2022, by an amending
Act (the “Amendment Act”), to expressly recognize the use of
electronic media for holding board of directors and shareholders meetings,
sending invitation letters or other documents, and appointing proxies for
shareholders meetings. The Amendment Act also amends the procedures for calling
board of directors meetings in cases where the chairman of the board does
not call the meeting or the chairman of the board is absent. The rationale
for these amendments is to facilitate the business operations of public
companies and relax the burdensome requirements placed upon them. The
amendments are also regarded as a part of the implementation of Thailand’s
National Strategy and National Economic Reform Plan, with an aim of promoting
entrepreneurial activities and enhancing the country’s competitiveness.
The key amendments under the Amendment Act are as follows:
1.
E-Publication
Any
publication or notification required to be made by a public company to other
persons or the public may be carried out via electronic media in addition to
the option of notification via an advertisement published in a local
newspaper.
In the
past, when a public company had to publish information or provide
notification to the public, for example, invitation letters to shareholders
meetings, capital reductions, amalgamations, or dissolutions of the company,
the public company had to publish the information in newspapers made
available to the public in the area in which the company’s head office is
located. The purpose of this legal requirement is to ensure that all relevant
persons are aware of important information concerning the company.
Inevitably, this caused companies to incur costs. In practice, companies
usually choose to publish this information through newspapers published by small
publishing houses established for this specific purpose in
order to save costs, although the general public does not typically
read these newspapers. Public companies now have the option of publishing
their information through electronic media, including by posting the
information on their websites.
The
requirements concerning e-publication methods will be further determined by
the subordinate legislation which is to be announced by the Company Registrar
of the Department of Business Development, the Ministry of Commerce (the “Company
Registrar”). Conceptually, an e-publication must contain the same content
as a publication sent directly to shareholders, and there must be measures in
place to detect and trace any alteration to its content.
2.
E-Notice
2.1 Notices given by the
company
Any notice by a public company can be served on other
persons via electronic means if the intended recipients have stated their intention
to the company or consented to accept the e-notice method.
Before
the Amendment Act, sending a notice to a specific recipient was usually made
by way of registered mail or by hand (in case of a small number of
shareholders). This amendment provides for an alternative means of notice
provision, so long as the intended recipient has accepted such method of
electronic communication. However, it should be noted that the details and
requirements concerning the use of e-notice will be further set out in the
subordinate legislation, which has yet to be published by the Company
Registrar.
2.2 Notices given by
shareholders
An invitation
notice to a shareholders meeting initiated by shareholders can be served on
shareholders via electronic means, similar to the
method used when the company or the board calls the meeting if the
shareholders have stated their intentions to the company or consented to
accept the e-notice method.
Paragraph
2 of Section 100 of the PLCA allows shareholders to call a shareholders
meeting themselves, without the coordination of the board of directors.
Pursuant to the Amendment Act, the invitation letter to shareholders can be
served by e-notice. The shareholders calling the meeting are not required to
obtain separate consent from the other shareholders to allow the e-notice method, and can use the acceptance granted to the company
as if it had been granted to them.
3.
E-Meeting
The
Amendment Act confirms that board of directors and shareholders meetings can
be convened via electronic media (such as teleconference or videoconference)
in accordance with the laws on e-meetings (currently pursuant to the Decree)
unless the company’s articles of association (the “AOA”) specify
otherwise, meaning that the AOA need not expressly permit the company to
convene an e-meeting. However, if any company would like to limit meetings to
physical meetings, this must be stated in its AOA. To clarify, public
companies whose AOA are silent on e-meeting procedures can conduct e-meetings
without specifying the point in their AOA.
The
Amendment Act also shortens the period required for sending invitations for
board of directors meetings to all directors from
seven days prior to the date of the meeting to three days prior to the date
of the meeting. Invitation letters can be sent to directors via electronic
means as described in paragraph 2.1 above.
When a board of directors or shareholders meeting is convened
through electronic means, it is deemed that the meeting is held at the
location of the head office of the company.
4.
E-Proxy for Shareholders
Meeting
The
appointment of a proxy by any shareholder of a public company for the purpose
of attending and voting in a shareholders meeting can be made by secure
electronic means that use reliable methods to ensure the integrity of the
appointment in accordance with the specific requirements to be set out by the
Company Registrar.
It should
be noted that a proxy appointment letter is an instrument that is subject to
stamp duty under the Revenue Code of Thailand. Therefore, the subordinate
legislation to be put in place must also address this issue in order to ensure that the use of e-proxies is practical.
5.
Procedures for Calling Board of
Directors Meetings
New
procedures allowing any two of a company’s directors to call a board of
directors meeting when (i) the chairman of the
company fails to call a meeting when requested or (ii) there is no chairman
or vice-chairman of the company, are also specified in the Amendment Act.
This amendment addresses situations in which a board of directors meeting
cannot be held due to the lack of cooperation or absence of the chairman.
The Amendment Act
will certainly reduce the burdensome requirements placed upon public
companies. It is expected that the subordinate legislation in connection with
the Amendment Act will be announced within thirty days of the Amendment Act
being published in the Royal Gazette and will provide detailed conditions and
requirements for companies wishing to adopt these electronic means. We will
provide further information when the subordinate legislation is made
available.
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