Proposed amendments to Public Limited Company Act approved

The Thai cabinet recently approved proposed amendments to the Public Limited Company Act that will allow public companies to use electronic means to hold meetings and communicate with shareholders.

 The amendments proposed include:

• Flexibility to call meetings or send information to directors, shareholders and creditors electronically
• Allowing meetings of directors and shareholders to be held via electronic media
• Enabling shareholders to appoint a proxy electronically for shareholder meetings

Advertising and issuance of notices electronically

Where a public company is required or allowed to advertise any information to relevant persons in a local newspaper it must do so for at least 3 days consecutively and must send notices, letters etc. by hand or registered mail.

The draft amendment provides an option to place advertisements through electronic means according to the criteria stipulated by the Director General of the Department of Business Development and to send documents electronically to directors, shareholders and creditors who have declared their intention or given their consent to receive documents electronically, provided that the company or the board of directors comply with the criteria stipulated by the Director General.

Holding shareholder meetings online

The draft amendment allows a public company to hold shareholder meetings via electronic means if the meeting is held in accordance with the laws regarding e-meetings and it is not otherwise prohibited under its Articles of Association.

If the shareholder meeting is held via electronic means, it is deemed to have been held at the head office of the company.

E-proxy for shareholder meetings

The draft amendment allows a shareholder to appoint a proxy by electronic means provided that the methods used are safe and ensure that such appointment has been made by the shareholder, subject to the criteria stipulated by the Director General.

Holding meetings of directors online

The Act currently requires meetings of directors to be held at least once every three months at the head office of the company or a nearby province unless the Articles of Association requires the meeting to be held elsewhere. The draft amendment adds a restriction that if a meeting is to be held elsewhere, it must still be held in Thailand.

The draft amendment allows meetings of directors to be held via electronic means if the meeting is held in accordance with the laws regarding e-meetings and it is not otherwise prohibited under the company’s Articles of Association.

Summoning meetings of directors

The draft amendment also makes changes in general to the rules for summoning meetings of directors.

The notice period for calling a meeting of directors is reduced from seven days to three days. A shorter notice period for necessary or urgent matters is still available. In case there is no chairman of the board, meetings of directors shall be summoned by the deputy chairman and if there is no deputy chairman, at least two directors may jointly call a meeting.

Under the current Act, if a request is made by at least two directors to summon a meeting of directors, the chairman shall fix the date of the meeting within fourteen days from the date of the request.

This will be amended so that at least two directors may jointly request the chairman to summon a meeting only if there are justifiable grounds or in order to protect the rights or benefits of the company. If the chairman does not call the meeting within 14 days, the directors who made the request can call the meeting themselves.