Operation of a private company in Thailand: Articles of Association
The Articles of Association are the regulations of the company concerning its internal affairs such as voting rights. It is a very important corporate document, the content of which is determined at the Statutory Meeting. Thai private limited companies may choose to either adopt their own Articles of Association, or refer to the relevant provisions of the Thai Commercial Code.
The sample Articles of Association below is quite basic and in practice would be customized to include various requirements specific to the operation of a particular company.
ARTICLES OF ASSOCIATION
KORAT TRADING CO., LTD.
1) Unless otherwise specified herein, the provisions of the Thai Civil and Commercial Code concerning private limited companies shall apply in all respects.
2) The amendment or modification of these Articles shall be referred to a meeting of shareholders for consideration in accordance with the law.
Shares and Shareholders
3) All shares of the Company shall be [type/s of shares], entered in named certificates and fully paid-up. Each share certificate shall be signed by at least one director and shall bear the Company seal.
4) Share transfers 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 its register of shareholders.
5) The Company shall not hold its own shares or take them in pledge.
6) The number of directors shall be fixed by a general meeting of shareholders.
7) Any vacancy occurring in the Board of Directors may be filled by any person as may be appointed by the Board of Directors. Any persons so appointed shall retain their office for such duration only as for which the vacating director was entitled.
8) At least half the total number of directors must be 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.
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 at least once each year. Such meetings shall be referred to as an ‘ordinary meeting’. All other meetings shall be known as extraordinary meetings.
11) The Board of Directors may convene extraordinary meetings whenever they see fit or in response to a request made in writing by shareholders holding not less than one-fifth of the shares.
12) Notice of the convening of a general meeting shall either be published at least twice in local newspapers, or shall be sent to all shareholders 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 vote via proxy.
14) The chairman of the Board of Directors shall preside at every shareholders meeting. If there is no such chairman or he/she is not present at the meeting, then the meeting shall elect one of the members present to act as chairman.
15) Shareholders representing at least one-fourth of the capital of the Company must be present to form a quorum for a general meeting. Each resolution shall be passed by a majority vote. In the case of a tied vote then the chairman shall have a second and casting vote. The passing of special resolutions requires not less than three-quarters of the total vote of shares represented at the meeting.
16) The directors shall prepare a balance sheet showing assets and liabilities of the Company, and a profit and loss statement, at least once every financial year counting from 1 January to December 31.
17) The balance sheet must be examined by at least one auditor and then submitted for approval at a general meeting within four months from the date on which the balance sheet was finalised.
Dividend and Reserve Fund
18) The Company must place in a reserve fund at the time of distribution of dividends, 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 were approved at the Statutory Meeting held on [date]
[Name and signature of director]
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