6 replies to this topic

[samran]

Hi all,

Apologies if this question is badly phrased, but I'm looking to understand legal technicalities of shareholder rights, and am just starting to try and get me head around issues.

Are there any circumstances under Thai law where shareholders need some sort of super majority vote for certain things to happen?

If anyone can outline these circumstances to me, I'd be grateful.

Cheers
Samran.

[Time Traveller]

Typically companies require a quorum (which is a predetermined number of shares) of shareholders that must be present on any voting to pass a motion before it can be accepted.
For example, many companies need a quorum of say 75% of shareholders to be present for voting on a motion to be passed. Even if only 51% vote it will still be accepted. However, if there are 51% of shareholders vote for a motion but less than the number present for their to be a quorom, then the motion will not pass despite a accepted by a majority of shareholders.

Edited by Time Traveller, 2012-09-20 14:56:17.

[samran]

Typically companies require a quorum (which is a predetermined number of shares) of shareholders that must be present on any voting to pass a motion before it can be accepted.
For example, many companies need a quorum of say 75% of shareholders to be present for voting on a motion to be passed. Even if only 51% vote it will still be accepted. However, if there are 51% of shareholders vote for a motion but less than the number present for their to be a quorom, then the motion will not pass despite a accepted by a majority of shareholders.

Thanks for that.

But that sounds like something which would be mandated via articles of association rather than any legislation....which is reassuring.

Sounds like thouogh there is nothing statutory under Thai law which requires super majorities though?

[Time Traveller]

Th

Typically companies require a quorum (which is a predetermined number of shares) of shareholders that must be present on any voting to pass a motion before it can be accepted.
For example, many companies need a quorum of say 75% of shareholders to be present for voting on a motion to be passed. Even if only 51% vote it will still be accepted. However, if there are 51% of shareholders vote for a motion but less than the number present for their to be a quorom, then the motion will not pass despite a accepted by a majority of shareholders.

Thanks for that.

But that sounds like something which would be mandated via articles of association rather than any legislation....which is reassuring.

Sounds like thouogh there is nothing statutory under Thai law which requires super majorities though?

yes articles of association and company by-laws. Note that a quorum could actually be higher or lower than 50% and could be different for different matters such as in the case where a company would vote on a merger or liquidation.
I don't know of any specific legislation about this.

[samran]

TT - appriciate your comments. Thank you.

[Sunbelt Asia]

Hi Samran,

This is the law unless there are special articles of association that will grant additional rights:

                                        

Shareholding %	Control	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. Said shareholder will be able to pass not only ordinary resolutions but also special resolution on its own	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
		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.
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.
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
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
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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[samran]

sunbelt - really good. Appriciate that.

Outlined things I had heard about - especially about 'special resoultions'.