COVID-19: Companies in Thailand Granted Limited Relief from Statutory Annual Meeting Requirements
The Department of Business Development (DBD) of Thailand’s Ministry of Commerce has given companies more flexibility regarding the deadline for holding their mandatory annual general meeting of shareholders (AGM) for this year, in light of the disruption caused by the COVID-19 crisis.
All companies in Thailand are required by law to hold an AGM within four months from the end of the fiscal year. The purpose of the AGM is, among other things, to approve the company’s audited financial statements for the previous fiscal year. Failure to comply by the deadline would subject the company and its signatory directors to monetary fines.
However, the escalating international travel bans and the Thai government’s request for people to stay home during the ongoing COVID-10 outbreak have made the convening of these corporate meetings challenging at best, and almost impossible at worst. Most companies in Thailand have a fiscal period ending December 31, meaning that, for these companies, the upcoming statutory deadline to hold the AGM is April 30, 2020, which does not seem viable in this global pandemic.
The current laws do not provide a channel for companies to apply for a time extension or exemption from the AGM requirement. Therefore, in order to relieve the impact of the COVID-19 outbreak on companies’ statutory compliance, on March 4, 2020, the DBD authorized the DBD registrar to waive the fine for failing to hold an AGM by the deadline. Companies that wish to apply for the waiver need to submit a letter to the DBD (after the meeting is held) stating:
- That the company’s AGM was held after the four-month deadline passed; and
- The reason for delay in relation to the impact of the COVID-19 situation.
Discretionary waivers will be granted on a case-by-case basis and do not extend the statutory deadlines for submission of the audited financial statements and list of shareholders.
Additional alternative measures to ease the limitations of a physical meeting do exist, but they are limited. The “paper meeting” arrangement is not legally permissible, as the meetings must be held at a physical location. Generally, the shareholders have the choice of attending the AGM either in person or by proxy. The other solution would be electronic attendance, such as via teleconference or video conference, which have been permitted in principle since 2014. However, this method is not practical due to onerous conditions—for example, no electronic attendance from outside Thailand is allowed, and no more than two-thirds of the quorum can attend the meeting electronically.