Corporate and Commercial Law Amendments in 2023: Enhancing Business Practices

In response to the evolving social and technological landscape of our globalized society, it has become imperative to modify existing laws to align with the current needs and demands. The advent of globalization, coupled with advancements in technology, has necessitated a reevaluation of corporate and commercial laws. These modifications address the challenges faced by businesses, particularly small and medium-sized enterprises (SMEs), enabling them to thrive and streamline outdated processes.

On February 7, 2023 (90 days after the announcement), the Royal Gazette published the revised Corporate and Commercial Code, which caters to modern lifestyles and technology integration into our daily routines. This article highlights eight significant amendments that are crucial for businesses:

1. Streamlined Company Registration (Article 1016):
The revised law simplifies the process of company registration by allowing it to be filed at the company partnership registration office or the Department of Business Development (DBD) located in the head office area. This change provides greater convenience and clarity, eliminating confusion for businesses with multiple offices in different areas.

2. Reduced Minimum Number of Company Founders (Article 1097):
The number of initiators required to start a company has been reduced to a minimum of two individuals. This amendment facilitates faster and easier company registration, fostering economic growth. Previously, the law mandated a minimum of three initiators, creating unnecessary hurdles for aspiring entrepreneurs.

3. Streamlined Termination of Memorandum of Association (Article 1099):
The revised law reduces the waiting period to terminate a memorandum of association if it remains unregistered for three years from the date of acceptance by the registrar. This change benefits other entrepreneurs who wish to utilize the same company name previously registered by a non-active entity.

4. Introduction of Company Seal Model for Share Books (Article 1128):
Companies with a company seal model must now stamp their seal on every share book. This requirement enhances clarity and serves as a verification mechanism for genuine share books.

5. Facilitation of Electronic Board Meetings (Article 1162/1):
The revised law allows boards of directors to conduct meetings through electronic media, reducing the need for physical meeting spaces and related expenses.

6. Notice Requirements for Meetings (Article 1175):
Meeting notices for boards and shareholders have been modified based on share types. For name shares, the process of advertising in a local business newspaper has been simplified. Additionally, for shares with holders, electronic media can now be utilized as an alternative method of notification.

7. Dividend Payment Timeframe (Article 1201):
Limited companies are now required to pay dividends within one month after the general meeting or board of directors' conclusion on the matter. This provision safeguards the rights of minority shareholders.

8. Remodeled Merger and Acquisition Process for Limited Companies (Article 1238):
The revised law introduces two distinct options for mergers and acquisitions. Companies undergoing a merger can either establish a new entity or choose to retain one of the merging companies, eliminating the previous requirement of setting up a new entity in all cases.

These amendments to the Corporate and Commercial Code demonstrate a commitment to modernizing business practices and creating a more conducive environment for enterprises to thrive. By embracing these changes, businesses can navigate the legal landscape with greater ease and efficiency, fostering growth and innovation in today's dynamic market.

Written by: Suthawan Boonmak & Rungporn Bussabong

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