On 28 February 2022, the Senate approved the Draft Public Limited Company Act (No. ..) B.E. …. (….) (the “Draft PLC Act”) for amendments of the Public Limited Company Act B.E. 2535 (A.D. 1992) (the “PLC Act”) in order to accommodate the current business operation of a public company and resolve some weak points of the PLC Act. In this regard, the Draft PLC Act shall become effective after 30 days from the date of publication of the Draft PLC Act in the Royal Gazette.
The main contents of the Draft PLC Act are as follows:
- Allowing the sending of letters or documents via electronic methods
The Draft PLC Act specifies that in case a company or a Board of Directors has duties to send letters or documents as required by the PLC Act to its directors, shareholders or creditors, if such persons have declared an intention or given consent for electronic submission of such letters or documents, a company or a Board of Directors may send such letters or documents to them via electronic methods according to the criteria stipulated by the public company registrar (the “Registrar”).
- Amending the conditions of the Board of Directors’ Meeting and the Shareholders’ Meeting
The Draft PLC Act specifies that, unless otherwise specifically indicated in the Articles of Association, the Board of Directors’ Meeting and the Shareholders’ Meeting of a public company may be conducted via electronic methods according to the law on electronic meeting. In this regard, the principal business office of the company shall be deemed as the place of the meeting. Besides, the Draft PLC Act amends the details of the summons of the Board of Directors’ Meeting and the Shareholders’ Meeting as follows:
- The Board of Directors’ Meeting
• In case there is a probable cause or in order to protect the rights or benefits of a company, at least 2 directors may jointly request the chairman of the Board of Directors to summon a meeting, provided that matters to be considered in the meeting must be notified to the chairman with such request. The chairman shall summon and fix the date of the meeting within 14 days from
the date of receiving such request. In case the chairman does not undertake the aforementioned, directors who have made such request may summon and fix the date of the meeting within 14 days after the expiration of such period.
• In case there is no chairman of the Board of Directors, deputy chairman shall be the person who summons a meeting of the Board of Directors. In case there is no deputy chairman, at least 2 directors may jointly summon a meeting of the Board of Directors.
• Written notice summoning a meeting shall be sent to all directors not less than 3 days prior to the date of the meeting, except in the case of necessity or urgency for the purpose of protecting rights or benefits of a company, summons of a meeting may be notified by other means and an earlier date of the meeting may be fixed.
- The Shareholders’ Meeting
• In case shareholders summon a meeting as allowed under paragraph two of section 100 of the PLC Act, such shareholders may send a notice summoning the meeting to shareholders via electronics methods; provided that the shareholders have already declared their intention or given consent to the company or the Board of Directors.
• The appointment of a proxy may be carried out via electronic methods, provided that such methods are safe and credible that such appointment has been duly made by a shareholder giving a proxy, according to the criteria stipulated by the Registrar.
The amendment to the PLC Act by the Draft PLC Act is a good direction as it will be beneficial to and facilitate a public company in its business operation under the current situation in order to reduce the redundancy costs and meeting procedures. However, we have some remarks on the Draft PLC Act with respect to the sending of letters or documents via electronic methods with the declaration of the intention or consent provided. For example, as most of a public company in Thailand are companies whose shares are listed and traded on the Stock Exchange of Thailand, there are constant changes on holders of the shares until a company closes its share register book or till the record date fixed by a company. A company will have a limited period of time to send the notice summoning a shareholders’ meeting to its shareholders. It is not clear on the method for the shareholders in making a declaration or giving consent, and whether such declaration or consent will be provided by all in a short period of time, and a company may have additional duties and related costs. As a result, it may cause difficulties for a listed company to follow the process. The same concern also applies to the case where a company has transactions with the creditors. It is unclear on (i) the types of creditors that this procedure will cover and (ii) whether such declaration or consent applies to all transactions with a creditor.
Therefore, the conditions in respect of the electronic submission of letters or documents in the Draft PLC Act may not be aligned with the normal practice of a public company. We suggest considering the issuance of a sub-regulation to support and accommodate a public company relating to the above issues.
Disclaimer: Our Newsletter has been prepared for the general information of our clients. It does not represent our legal advice and should not be regarded as such. This Newsletter is provided for your information purpose only. All right reserved, all information without engagement subject to modification. This document may be duplicated and distributed only with express of The Capital Law Office.
If you should have any inquiries about out Newsletter or would like more information about The Capital Law Office, please contact: [email protected]