Thai Private Limited Company: Shareholders Voting Rights
November 19 2012 Categories: @ Thailand Investment Blog, Company Formation Thailand No comments yet
In this post we will discuss the voting rights of shareholders at the shareholder meeting of a Thai limited company depending of the amount of their shareholding.
Please see the remarks column to understand the assumptions on which this table is based.
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Shareholding % |
Control
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Remarks |
| Shareholder own more than 75% of the shares |
Give the shareholder an absolute control over all the decisions to be made at the shareholders meetings in accordance with the law.
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This table is based on the following assumption:
(1) All the shareholders of the company are represented at the meeting. (2) The company does not have preference shares with special voting rights (3) The company does not have special articles of association or there is no shareholders agreements that grants additional rights to minority shareholders
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Special Resolutions of a Shareholders Meeting are resolutions about the following matters: - amend the articles of association; - amend the memorandum of association; - increase the capital, reduce the capital; - pass a resolution to place the company in liquidation, - Pass a resolution to merge the company with another company.
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| Shareholder own more than 50% of the shares, but less than 75% | Give this shareholder the power to pass any ordinary resolutions at shareholders meetings. In other words this shareholder can run the ordinary business of the company on its own.
This shareholder may not pass special resolution without the agreement of other shareholders |
In this table we only discuss the right of vote of the shareholders at a shareholder meeting.
Shareholders have other rights that do not depend from their percentage of ownership but that are inherent to their shares.
For example a shareholder may take legal action against a Director of the company that violates the duties imposed to him by the law. If the company refuses to takes action against such Director any shareholder may do so.
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| Shareholder own more than 25% of the shares but less that 50% |
This shareholder has the:
- Right to require the company to convene an extraordinary meeting of shareholders;
- Right of the shareholder to block special resolutions
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Shareholder own more than 20% of the shares but less than 25% |
This shareholder has the:
- Right to require the company to convene an extraordinary meeting of shareholders; - May not otherwise influence the decision of the shareholder meeting
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Shareholder own less than 20% of the shares |
This Shareholder may not on its own requires the company to convene a shareholder meeting and may not influence the passing of any special resolution or ordinary resolution
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If you are to invest into a business as a minority shareholder you should before to invest negotiate terms which will give you additional voting right.
For example one way to do this is to add to the articles of association of the company a list of special matters which would necessite the approval of for example 75% of the shareholders or 85% of the shareholders represented at a shareholder meeting depending of the % of shares you intend to acquire in the company.
Note: This post is an excerpt of Rene Philippe Dubout next book: “How to Invest Safely Into Thailand” to be published in January 2010
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 2009-11-23 04:47:10.
