Thailand: Ease of doing business

Summary of the Order of NCPO No. 21/2560

Corporate Alert

By:

According to the World Bank Report in relation to Ease of Doing Business attached herewith, Thailand is ranked at 46th among 190 countries for ease of doing business. As a result, the Head of National Council for Peace and Order (NCPO), by virtue of Section 44 of the Interim Constitution of Thailand B.E. 2557, issued the Order of NCPO No. 21/2560 regarding the amendment to the law for the ease of doing business (Order) to improve and facilitate business doing in Thailand. The Order was published in the Government Gazette and has become effective on 4 April 2017.

Five legislations were amended by the Order being: (i) the Civil and Commercial Code, (ii) the Labour Protection Act B.E. 2541 (1998), (iii) the Public Limited Companies Act B.E. 2535 (1992), (iv) the Social Security Act B.E. 2533 (1990) and (v) the Bankruptcy Act B.E. 2483 (1940). Details of key amendments are summarised as follows.

 

Legislations

Subject

Repealed Provisions

New Provisions

Civil and Commercial Code

Section 1016

Place of any registration of a partnership or company

At the location where a partnership or company has been established

At any location as prescribed by the laws

Section 1020/1 (New)

Reduction or exemption of governmental fee

-

The Minister is empowered to issue ministerial regulations to reduce or exempt certain fees.

Section 1108 (1)

Activities conducted at a statutory meeting of company

Agreement on Articles of Association of company

Solutions to resolve disagreements between directors and shareholders can additionally be agreed apart from an agreement on Articles of Association of company.

Section 1128

Share certificates

Needed to be signed by at least 1 director and affixed with company's seal

Company's seal is not required to be affixed.

Section 1201 para. 4 (New)

Payment of dividends

-

Payment of dividends has to be done within 1 month from the date of annual general meeting or directors' resolution.

Section 1237 (5) (New)

Ground for a company to be dissolved by court's order

-

Having any cause resulting in impossibility of continuance of company

Labour Protection Act B.E. 2541 (1998)

Section 108

Work Rules

Copy of Work Rules must be submitted to the Director-General who can order an amendment of illegal Work Rules

Submission of copy of Work Rules and power to order such amendment are cancelled.

Section 110

Amendment to be in accordance with the amended Section 108

Public Limited Companies Act B.E. 2535 (1992)

Section 100

Shareholders' power to request a holding of extraordinary general meeting of shareholders

  • Shareholders holding no less than 20% of all shares issued or not less than 25 shareholders holding no less than 10% of all shares issued may request the board of directors in writing to convene an extraordinary meeting of shareholders at any time
  • Reasons for holding such meeting have to be included in the request
  • The board of directors is required to hold such meeting within 1 month from the date receiving such request.
  • Any shareholder holding no less than 10% of all shares issued may request the board of directors in writing to convene an extraordinary meeting of shareholders at any time.
  • Reasons for holding such meeting have to be included in the request.
  • The board of directors is required to hold such meeting within 45 days from the date receiving such request.
  • If the board of directors does not hold the meeting within such 45 day period, the eligible shareholders may convene such meeting within 45 days from the completion of such 45 day period.  The company is responsible for expenses arising from such meeting as appropriate.  If the quorum is not met, the shareholders requesting the meeting will be responsible for such expenses.

Section 128

 

  • Shareholders holding no less than 20% of all shares issued or not less than 1/3 of all shareholders may request the Registrar in writing to appoint an inspector to inspect affairs and financial status of company as well as operation of its board of directors.
  • Such request shall include topics to be inspected and name and address of shareholders acting as an agent.
  • An order of appointment of inspector(s) shall include topics to be inspected.
  • Any shareholder holding no less than 5% of all shares issued may request the Registrar in writing to appoint an inspector to inspect affairs and financial status of company as well as operation of its board of directors.
  • Such request shall include causes and topics to be inspected and name and address of shareholder acting as an agent.
  • If the Registrar opines that there is a reasonable cause, he may order an appointment of inspector(s) which shall include topics to be inspected.

Social Security Act B.E. 2533 (1990)

Section 84/2 (New)

Discretion for time extension regarding information or contribution relating to social security fund

-

The Minister is empowered to appropriately or necessarily extend  timeline specified in law in case of force majeure or necessity

Bankruptcy Act B.E. 2483 (1940)

Section 90/12 (6)

Restrictive covenants as from the date that the court accepts the petition for rehabilitation

A secured creditor shall not enforce secured property for repayment unless permitted by the court receiving the petition.

A secured creditor shall not enforce secured property for repayment unless (i) permitted by the court receiving the petition or (ii) it has been already 1 year since the court receiving the petition.  Such 1 year period may be extended by the court for up to 2 times with not exceeding 6 months for each time.

Section 90/14 bis (New)

Perishable secured property

-

If the secured property is easily perishable, exposes to damage upon long term possession or incurs expenses for reservation (higher than its value), the secured creditor may sell such property and keep proceeds from such sale.

Section 90/46

Resolution of creditors approving the rehabilitation plan

Please refer to Section 90/46

Apart from the existing requirements, the resolution of the majority creditors must consist of not less than 2/3 of all debts of creditors attending and voting.

Section 148/1 (New)

E-Notice

-

Publication of court's orders or judgment or notices or orders of the Receiver in a daily newspaper can be done via electronic public means as prescribed in the laws.

Section 173 para. 2

prima facie assumption

It is prima facie assumed that if a receivership order is published in the Government Gazette and daily newspaper, everyone acknowledges it.

It is prima facie assumed that if a receivership order is published in the Government Gazette and daily newspaper or electronic public means as prescribed in the laws, everyone acknowledges it.


REFERENCE

1. Order of NCPO No. 21/2560 - ease of doing business (Thai version)