Doing Business in Thailand

This is the third of a series of posts about Thai private limited company corporate documents translated in English.

The articles of associations of your company are another important corporate document of your company. As a matter of fact the decision on the content of the company articles of associations is actually taken during the statutory meeting.

Now, Thai private limited companies do not necessarily need to have article of association. The founders at the time of incorporation may choose either to adopt articles of association or instead to simply refer to the disposition of the Thai Commercial Code.

The example of articles of associations translated below is very basic and it is possible to actually customize them to include preference shares or other specific requirements.

ARTICLES OF ASSOCIATION

OF

DOINGBUSINESS (THAILAND) Ltd.

CHAPTER 1

General Provision

1)      Unless otherwise specified herein, the provisions of the Thai Civil and Commercial Code concerning limited companies shall apply in all respects.

2)      The amendment or modification of these Articles shall be referred to the meeting of shareholders for proceeding in accordance with the law.

CHAPTER 2

Share and Shareholders

3)      All shares of the Company shall be ordinary shares, entered in name certificates and fully paid-up.  Each share certificate shall be signed by at least one director and shall bear the Company seal.

4)      Share transfer must be in writing, and shall be executed by the transferor and the transferee and confirmed by at least two witnesses. A transfer of shares shall have the full effect against the Company or the third parties only when the Company has registered such transfer in the register of the shareholders.

5)     The Company shall not hold its own shares or take them in pledge.

CHAPTER 3

Directors

6)      The number of directors shall be fixed by a general meeting of shareholders.

7)     Any vacancy occurring in the Board of Directors otherwise by rotation may be filled up by any person as may be appointed by the Board of Directors. Any persons so appointed shall retain his office during such time only as the vacating director was entitled to retain the same.

8)      There must be at least one-half of the number of directors present to form a quorum.

9)     The Board of Directors shall be responsible for the Company’s management and a chairman of the Board shall be appointed among the directors.

CHAPTER 4

Shareholders Meeting

10)    A general meeting of shareholders shall be held within six months as of the date of    registration of the Company and shall subsequently be held once at least in a year.  Such meeting shall be called an ordinary meeting. All other meetings shall be called extraordinary meetings.

11)    The Board of Directors may summon extraordinary meetings whenever they think fit or upon the request made in writing by shareholders holding not less than one-fifth of the shares.

12)    Notice of the summoning of every general meeting shall either be published at least twice in local newspapers or shall be sent by shareholder at least seven days prior to the date fixed for the meeting.

13)    Any shareholders who are unable to attend any meeting in person may give proxy.

14)    The chairman of the Board of Directors shall preside at every shareholders meeting. If there is no such chairman or he is not present at the meeting, the meeting shall elect one of their members present to be chairman.

15)    Shareholders representing at least one-fourths of the capital of the Company shall be present a quorum of a general meeting. A resolution shall be passed by a majority vote. In case of a tie the chairman shall have a second and casting vote. Special resolution shall require not less than three fourth of the total votes of the shares represented at the meeting.

CHAPTER 5

Balance Sheet

16)    The directors shall prepare a balance sheet showing assets and liabilities of the Company and a profit and loss statement at least once in a financial year counting from 1 January to December 31.

17)    The balance sheet must be examined by at least one auditor and submitted for approval of the general meeting within four months from the date of the balance sheet.

CHAPTER 6

Dividend and Reserve Fund

18)    The Company must appropriate to a reserve fund at each distribution of dividend, at least one-twentieth of the profit arising from the business of the Company, until the reserve fund reaches one-tenth of the capital of the Company or such higher proportion thereof.

***  ——————————————-***

These articles have been approved by the statutory meeting on [xxxx] 2009.

(Signed) - Signature – Director

([xxxx] )

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact.

Originally posted 2009-09-07 10:22:26.