On May 23, 2022, the Public Limited Companies Act (No. 4) B.E. 2565 (2022) was approved and published in the Government Gazette. The updated law amends the previous version of the Public Limited Companies Act by formally allowing board of directors (BOD) and shareholders’ meetings to be held electronically, and amending corporate approval processes for public limited companies.
The new act came into effect the day after its publication, but full implementation of certain amendments will only become practical after the issuance of various related subrules and subregulations. The key elements of the new act are described below.
Electronic Dissemination of Company Notices and Advertisements
Under the previous version of the Public Limited Companies Act, required company notices, statements, and advertisements had to be published in a local newspaper where the company is located, for at least three consecutive days.
However, the amended act allows such notices, statements, and advertisements to be sent via electronic means, though the process must comply with subregulations to be issued by the Department of Business Development (DBD).
Electronic Delivery Options for Documents
The amended act allows public limited company notices or documents to be sent to company directors, shareholders, or creditors electronically instead of by registered mail, as long as the recipients have consented to receive such documents via electronic means. Electronic delivery of documents must comply with subregulations to be issued by the DBD.
Additional Individuals Authorized to Call BOD Meetings
In keeping with the previous version of the law, the amended act grants the chairperson of the BOD the authority to call a board meeting, and allows any two directors to jointly request that the chairperson call a meeting, in which case the chairperson must call the meeting within 14 days. The amended act further stipulates that if the chairperson does not call the meeting in accordance with the request, at the lapse of the 14-day window, the requesting directors can then directly call a BOD meeting in the following 14 days. The new act also allows the vice-chairperson to call a BOD meeting if there is no chairperson; this authority passes to any two directors if there is no vice-chairperson.
Electronic BOD Meetings
The amended Public Limited Companies Act allows BOD meetings to be convened by electronic means, unless this is prohibited by the company’s articles of association. Such meetings, which are deemed to be held at the company’s head office, must be held in compliance with the laws governing electronic meetings.
A public limited company’s BOD should meet at least once every three months. The previous version of the Public Limited Companies Act stipulated that the notice calling for a meeting be given to the directors in person or sent to them at least seven days in advance, but the amended act reduces the notice period to three days. In the case of an urgent matter and when needed to protect the rights and benefits of the company, the notice period can be shortened further and the notice can be sent electronically.
Electronic Shareholders’ Meetings
Similar to electronic BOD meetings, shareholders’ meetings can also be convened electronically if this is not restricted by the company’s articles of association and is in compliance with the laws governing electronic meetings. Likewise, the company’s head office is deemed the location of the meeting.
If a shareholders’ meeting is requested by the holders of at least 10% of the total issued shares, and the BOD fails to call the meeting within 45 days of receiving the shareholders’ request, the requesting shareholders can then call for a shareholders’ meeting in the subsequent 45 days. The meeting notice issued by the requesting shareholders can be sent electronically, provided the shareholders have consented to receive the documents via electronic means. This delivery of documents must comply with subregulations to be issued by the DBD.
Appointment of a Proxy Holder via Electronic Means
The amended act permits shareholders to appoint a proxy holder via electronic means, provided the method is safe, credible, and in accordance with the rules prescribed by the DBD. This is a change from the previous version of the act, under which the appointment of a proxy holder for a shareholders’ meeting had to be made in writing and signed by the grantor, with a hard copy submitted to the chairperson or a designee.
Tilleke & Gibbins will continue to monitor the new act’s implementation—particularly the development of regulations related to electronic processes—and provide updates as appropriate. For more information on these new laws, or any aspect of how public limited companies can comply with Thailand’s laws, please contact Chaiwat Keratisuthisathorn at [email protected] or +66 2056 5507, Onunya Chanpen at [email protected] or +66 2056 5603, or Suphitsara Jaturaphitjaroen at [email protected] or +66 2056 5645.