In order to comply with the legal requirements on Partnerships and Companies under the Thai Civil and Commercial Code, all companies are required to hold the meeting called the Annual General Meeting of the shareholders (AGM). The meeting must be held within 4 months from the financial year-end, meaning by the end of April each year (most private limited companies have a financial year ending on Dec, 31st).
Before the AGM can be held, the law requires that all the companies, through the board of directors must first issue a notice letter for their shareholders meeting and fix the date of the meeting (which again must be within the month of April if the financial year ended on Dec 31), at least 7 days prior to the meeting date (unless otherwise stipulated in the Articles of Association of the company). The notice letter must specify the place, date, and time of the meeting, as well as the nature of business to be transacted. It also must be published in a local newspaper and distributed via registered mail with an acknowledgement receipt to all shareholders whose names appear in the updated list of shareholders.
Basically, the company has to have its shareholders discussed and approved at the AGM consists of considering the directors’ report, the company’s audited financial statement and accounts for the previous fiscal year, electing directors in place of those retiring by rotation, appointing an auditor(s) for the current year and fixing their remuneration and other matters as stipulated in the Articles of Association of the company (if any).
Within 1 month after AGM date, companies must submit their audited financial statement, an updated list of shareholders, and other required documents to the Department of Business Development (DBD), the Ministry of Commerce.
Penalties will be imposed on the company and the director(s) for failure to comply with these requirements. For not holding the AGM or for failure to hold the meeting within the required timeframe (4 months after the end of its fiscal year), the company will be fined up to THB 20,000. Failure to submit the financial statement to the ministry will result in the director(s) being liable for the penalties as stipulated under relevant laws.
To avoid incurring these penalties, the directors of companies should ensure that they are fully aware of the AGM requirements as stipulated by the law. Contact ThaiLawyers if you require more information on annual general shareholders’ meeting.