Private vs. Public Companies in Thailand
1. Meetings
2. Filings
3. Capital Increase
4. Capital Decrease
Bottom line: Public Companies = stricter timelines, mandatory publications, stronger governance & creditor/shareholder protection.
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Thailand’s corporate legal framework distinguishes between Private Limited Companies (“Private Company”), which are governed by the Civil and Commercial Code (the “CCC”) and Public Limited Companies (“Public Company”), which are regulated under the Public Limited Companies Act B.E. 2535 as amended (the “PLC Act”). These two company types serve different roles in the economy, Private Company is typically used for closely held businesses with a limited number of shareholders, restrictions on share transfers, and comparatively simpler governance structures. In contrast, a Public Company is intended to facilitate broader capital raising, including access to public offerings of securities, and is subject to more rigorous governance, disclosure, and shareholder protection requirements.
Both Private Companies and Public Companies are required to register with the Department of Business Development (the “DBD”), which serves as the primary regulatory authority overseeing their incorporation, and ongoing corporate filings. For Public Companies, however, the regulatory framework extends further once a Public Company offers securities to the public or seeks a stock exchange listing, it becomes subject to the Securities and Exchange Act B.E. 2535 (as amended) (the “SEC Act”), together with the rules and supervision of the Securities and Exchange Commission (the “SEC”) and the Stock Exchange of Thailand (the “SET”). This additional layer of regulation, through the oversight of the SEC and the SET, reflects the heightened standards of transparency, corporate governance, and accountability required of companies that raise capital from, and are accountable to, the investing public.
Most companies in Thailand are initially established as Private Companies and may subsequently be converted into Public Companies when they wish to issue securities to the public. The purpose of this article is to highlight the key differences between the two company forms, with particular emphasis on matters under the purview of the DBD, so that companies which have only recently been converted to Public Company status can better understand their new compliance obligations and regulatory environment.
1. Meeting of Board of Directors and Meeting of Shareholders
Issue | Private Company – CCC | Public Company – PLC Act |
Notice of the Meeting of the Board of Directors | No specific period is prescribed by law, unless otherwise provided in the Articles of Association (AoA) | Send to directors at least 3 days before the date of the meeting, except in cases of urgency. (PLC Act s.82) |
Notice of the Meeting of Shareholders | Send to shareholders by registered mail or by hand at least 7 days (for ordinary resolution) or 14 days (for extraordinary resolution) before the date of the meeting (newspaper publishment only if AoA requires). (CCC s.1175 and s.1244) | Send to shareholders and the Public Company registrar by registered mail, by hand, or by electronic means at least 7 days (or 14 days in certain circumstances as required by regulation of the SEC/the SET) before the date of the meeting; and published in a newspaper for 3 consecutive days and at least 3 days before the date of the meeting. (PLC Act s.6, s.7/1 and s.101) |
Minutes of the Meeting of the Board of Directors | No specific period is prescribed by law. | Prepare within fourteen 14 days from the date of the meeting. (PLC Act s.96) |
Minutes of the Meeting of Shareholders | No specific period is prescribed by law. | Prepare within fourteen 14 days from the date of the meeting. (PLC Act s.96) |
2. Financial Statements and Shareholder Filings, and Other Registrations
Issue | Private Company – CCC | Public Company – PLC Act |
Audited Financial Statements | File with the DBD within 1 month from the date of AGM approval. (CCC s.1199 and Accounting Act s.11) | File an annual report together with a balance sheet and a statement of profit and loss with the DBD, and publish in a newspaper at least once within 1 month from the date of AGM approval. (PLC Act s.127 and Accounting Act s.11) |
List of Shareholders | File with the DBD within 14 days from the date of the AGM. (CCC s.1139) | File with the DBD within 1 month from the date of the AGM. (PLC Act s.64) |
3. Capital Increase
Issue | Private Company – CCC | Public Company – PLC Act |
Payment for Share | Every share must be fully paid up, but payment may be made in instalments of not less than 25 percent per call. (CCC s.1105 and s.1110) | Every share must be paid in full by a one-time payment. (PLC Act s.54 and s.136) |
Lower than Par | Shares cannot be issued at a price lower than their par value. (CCC s.1105) | Share can be issued at a price lower than their par value if: (1) such public company has been in operation for not less than one year and is suffering a loss; (2) approval by a meeting of shareholders is granted; (3) the discount rate having been clearly determined and indicated; and (4) compliance with section 137 of the PLC Act. (PLC Act s.52) |
Resolution for Capital Increase | Register with the DBD within 14 days from the date of the AGM/EGM approval. (CCC s.1228) | Register with the DBD within 14 days from the date of AGM/EGM approval. (PLC Act s.40 and s.136) |
Capital Increase and MoA Amendment | Register with the DBD from the date of receipt of capital increase proceeds, whether in cash or in kind. | |
Change of Paid-up Capital (Increase) | – | Register with the DBD within 14 days from the date of receipt of the capital increase proceeds, whether in cash or in kind (PLC Act s.40 and s.138); and published in newspaper for 3 consecutive days within 14 days from the registration date with the DBD. (PLC Act s.143) |
4. Capital Decrease
Issue | Private Company – CCC | Public Company – PLC Act |
Resolution for Capital Decrease | Register with the DBD within 14 days from the date of AGM/EGM approval. (CCC s.1228) | Register with the DBD within 14 days from the date of AGM/EGM approval. (PLC Act s.139) |
Procedure after Registration of Resolution for Capital Decrease | Published in a newspaper at least once; and send notice to creditors regarding the capital decrease (creditors may object to the capital decrease within 30 days from the date of such notice). (CCC s.1226) | Send notice to creditors regarding the resolution of capital decrease within 14 days from the date of AGM/EGM approval (creditors may object to the capital decrease within 2 months from the date of receipt of such notice); and published in a newspaper for 3 consecutive days within 14 days from the date of AGM/EGM approval. (PLC Act s.141) |
Capital Decrease and MoA Amendment | Register with the DBD following the expiration of the above objection period. | – |
Change of Paid-up Capital (Decrease) and MoA Amendment | – | Register with the DBD within 14 days following the expiration of the above objection period (PLC Act s.40 and s.142); and published in a newspaper for 3 consecutive days within 14 days from the registration date with the DBD. (PLC Act s.143) |
This article has outlined the key distinctions between Private Company and Public Company in the area of Meeting of Board of Directors and Meeting of Shareholders, Financial Statements and Shareholder Filings, Capital Increase and Capital Decrease, in our next article, we will explore further key distinctions between Private Company and Public Company in the operation of the company.
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For more in-depth information on any of the above, please reach out to Phatamol Phisitbuntoon at phatamol.p@wiseequitylegal.com or Narat Aphiphunya at narat.a@wiseequitylegal.com.
