One of the key legal compliance requirements for a company limited in Thailand is to hold an annual general meeting of shareholders, otherwise known as an 'AGM'. This type of shareholder meeting is considered as an 'ordinary' meeting of the shareholders rather than an extraordinary meeting of shareholders (EGM) and every shareholder has the right to be present at such meeting. This article shall discuss various key issues which are important when planning and holding an AGM, including the main process steps in holding an AGM, notice requirements and what an AGM should cover at a minimum.

When an AGM must be held?

In relation to when an AGM must be held, the Civil & Commercial Code (CCC) provides that "a general meeting of shareholders shall be held within six months after the [company's] registration, and shall subsequently be held at least every 12 months. Such meeting is called an ordinary meeting."

The CCC also provides that "the balance-sheet must be examined by one or more auditors and submitted for adoption to a general meeting within four months after its date". In practice, this effectively means that the date of the AGM is tied to the end of the Company's financial year (FY). Hence, if a company's FY ends on 31 December then it must hold its AGM within 30 April of the following year.

Normal Process Steps for Holding an AGM

In order to hold an AGM, it is generally speaking necessary to comply with the following steps:

Step 1 – Director to issue an invitation to hold a board of director (BoD) meeting;

Step 2 – Hold a BoD meeting which shall basically cover the following agenda items:

  1. Adoption of a report on the Company's operations in the last Financial Year (FY);
  2. Approval of audited Financial Statement (FS);
  3. Election of director(s) retiring by rotation;
  4. Approval for auditor for next FY year & fixing his/her remuneration;
  5. Consideration re distribution of a dividend & allocation to the reserve fund;
  6. Approval for the summoning of the AGM & determination of its agenda; and
  7. Other business (if any).

Step 3. – Director to issue an invitation to the shareholders for the AGM (at least seven (7) days in advance of the AGM unless a special resolution is to be considered at the AGM in which case the invitation must be sent out by registered post at least fourteen (14) days in advance of the AGM).

Step 4. – Hold the shareholder AGM which should at a minimum cover the following agenda items:

  1. Adoption of a report on the Company's operations in the last FY;
  2. Approval of audited Financial Statement (FS);
  3. Election of director retiring by rotation;
  4. Approval for auditor for next FY year & fixing his/her remuneration;
  5. Consideration re distribution of a dividend & allocation to the reserve fund.

Invitations to the AGM & Issues to Consider

At a minimum the invitations for an AGM should be mailed to all shareholders by registered post at least seven (7) days before the AGM unless a special resolution will be considered at the AGM in which case the notice must be mailed out at least 14 days in advance of the AGM. The invitation should also include a proxy form for each shareholder.

A newspaper advertisement or other notice requirements may also need to be complied with if the articles of association (AoA) of the company provide for this, such as if they reflect the previous shareholder meeting notice requirements under the Civil & Commercial Code (CCC). It is worth noting that the amended CCC has removed the requirement for companies to publish a notice in a local newspaper when calling a general meeting of shareholders. However, the amended CCC still requires companies that have issued bearer share certificates to shareholders, to publish a notice at least once in a local newspaper or via electronic means, as prescribed by the relevant ministerial regulations.

The notification for the AGM meeting should at a minimum include the following information:

  1. Location of the AGM;
  2. Date and time for the meeting;
  3. Agenda for the AGM;
  4. If the agenda of the AGM is to include a special resolution such as a capital increase/decrease then details of the proposed special resolution should also be included.

Requirements for Appointing Proxy at an AGM

If a shareholder cannot attend an AGM but wishes to appoint a proxy then they can appoint a proxy to vote on their behalf at such meeting. To be valid in accordance with Thai law, the proxy form must meet the following minimum requirements:

  1. It must be signed and dated by the relevant shareholder giving proxy;
  2. The proxy form must also mention the number of shares held by the shareholder, the name of the proxy and the meeting or meetings or the period for which the proxy is appointed.

If a shareholder is a juristic person/ legal entity such as a company limited then if it wishes to appoint a person to attend the AGM it must use a proxy form to appoint such person to attend the meeting and vote on its behalf. Proxy forms for a company should be executed by an authorized director and it is often good practice to attach a copy of the signing director's ID/passport as well as the Company's corporate registration documents which evidence that such director is authorized to legally bind it.

It is also worth noting that for a proxy to be effective, the CCC stipulates that the proxy form must be deposited with the Chairman of the shareholder meeting at or before the beginning or the meeting at which they propose to vote.

Minutes of Meetings (shareholder meetings & BoD meetings)

The Thai CCC provides that the directors may cause minutes of all proceedings and resolutions of meetings of shareholders and directors to be duly entered in the company's books which shall be kept at the registered office of the company.

Any such minutes signed by the chairman of a meeting at which a resolution was passed are presumed correct evidence of the matters contained in such minutes. Furthermore, all resolutions and proceedings of which minutes have been made are presumed to have been duly passed.

Any shareholder may at any time during business hours demand inspection of the meeting minutes.

Quorum Requirements

Unless there are provisions to the contrary in the AoA of a company the following quorum requirement shall apply to an AGM:

A general meeting of the shareholders (such as an AGM) can only be held if the amount of shareholders present for the meeting is equivalent to at least one-fourth (1/4th) of the company's registered capital.

Chairman of the AGM

Unless there are provisions to the contrary in the AoA of a company, then the chairman of the board of directors shall preside at every general meeting of shareholders, including the AGM. However, if there is no such chairman, or he/she is not present within fifteen (15) minutes after the time appointed for the holding the meeting, then the shareholders present may elect one of their members to be chairman of the meeting.

Directors Retiring by Rotation at AGM

The CCC provides that at the first ordinary shareholder meeting after the registration of a company limited and at the first ordinary meeting in every subsequent year one-third (1/3) of the directors, or, if their number is not a multiple of three, then the number nearest to one-third must retire from office.

It is worth noting that such director(s) who must retire from office at an AGM could be re-elected at the same AGM by the shareholders subject to the company's AoA and other relevant considerations such as what limitations (if any) are in a company's shareholder agreement.

Voting at an AGM

The CCC stipulates that unless a company's AoA provide otherwise, the following shall apply to voting at a shareholder meeting (including an AGM):

  1. At any general meeting of shareholders, a resolution put to the vote shall be decided on a show of hands, unless a poll is demanded by at least two (2) shareholders before or on the declaration of the result of the show of hands.
  2. If a poll is demanded, the result of the poll shall be deemed to be the resolution of the shareholder meeting.
  3. If a poll is duly demanded, it shall be taken in such manner as the Chairman directs.
  4. In the case of an equality of votes, whether on a show of hands or on a poll, the Chairman of the meeting shall be entitled to a second or casting vote.
  5. In the case of a special resolution, in order for it to be passed, it requires a majority of not less than three-fourths (3/4) of the votes of the present shareholders who are eligible to vote.

Audited Financial Statements (FS)

A copy of a company's audited FS must be sent to every shareholder entered in the register of shareholders at least three (3) days before the AGM. Copies of the audited FS must also be kept open at the offices of the company during the same period for inspection by the holders of certificates to bearer.

Dividends and the Reserve Fund

The CCC stipulates that no dividends may be declared except by a resolution passed in a general meeting (such as an AGM). Moreover, the directors may from time to time pay to the shareholders such interim dividends as appeared to the directors to be justified by the profits of the company. In relation to dividends, it is important to note that no dividend can paid otherwise than out of profits. If a company has incurred losses, then no dividend may be paid unless such losses have been made good.

In relation to the reserve fund, a company must appropriate to a reserve fund, at each distribution of dividend, at least one-twentieth (1/20th) of the profits arising from the business of the company, until the reserve fund reaches one-tenth (1/10th) part of the registered capital of the company or such higher proportion thereof as may be stipulated in the AoA of the company.

Originally published 19 Jul 2023

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.