On November 8, 2022, the Act Amending the Civil and Commercial Code (“CCC”) (No. 23) B.E. 2565 (2022) (the “Amendment Act”) was published in the Royal Gazette and will enter into force 90 days from the day after the publication date, i.e., on February 7, 2023.
Key amendments introduced by the Act
Prior to the Amendment, the minimum number of promotors required to form a company is three individuals. This has been changed to just two individuals.
Consolidation of private limited companies
The CCC before the Amendment recognizes only the concept of “amalgamation” in which two or more companies can amalgamate into one new legal entity. The Amendment introduces the merger in which one company merges with another company without forming a new legal entity.
*The regulation specifies the agenda items that must be considered at the Joint Shareholders’ Meeting. To mention some, the name of the Company resulting from the consolidation, the objectives, the appointment of directors, and the appointment of an auditor. In addition, the Joint Shareholders’ Meeting shall be held in proximity to the headquarter of one of the consolidating companies. A quorum to be met is provided, namely, a minimum of half of each company’s total shares must be represented. A Chairperson of the meeting shall be elected by the attending shareholders. Unless otherwise agreed, resolutions shall be resolved by the majority votes of the attending shareholders.
The Amendment Act also provides a set of transitional provisions to address the transition period and allows limited companies to adapt. In particular, Section 19 of the Amendment Act provides that in the event that an MOA is already registered prior to the date the Amendment Act becomes effective (i.e., February 7, 2023, the “effective date”) but the company has not yet been registered, the company shall be registered within 180 days from the effective date of the Act. However, as we already mentioned in the first table above, in case the MOA has not yet been registered prior to the effective date of the Act, the company shall be registered within 3 years from the MOA registration to avoid the latter being invalid.
Moreover, any business consolidation approved by a shareholders’ meeting prior to the effective date of the Amendment Act can be carried out according to the unamended version of the CCC.
What ILCT Ltd. can do for you
ILCT Ltd. can support companies in evaluating and carrying out the procedures for a business consolidation, either in the form of Amalgamation or Merger.
The firm has extensive experience in mergers, takeovers, and acquisitions of both private and public-listed companies. Our services include performing due diligence investigations, handling tender offers, tax planning and handling other formalities with the Securities Exchange Commission and the Securities Exchange of Thailand (in the case of public-listed companies), as well as preparing the necessary documentation to effect the change in ownership and the taking of necessary corporate actions, etc.
Contact us at firstname.lastname@example.org.
Amendment to the Civil and Commercial Code with an aim to introduce a new form of merger and changes in the structure of a private limited company. Download