EYES ON ALIENS

New draft bill on single-shareholder companies will cover the issue of nominees of foreign companies.

The new draft bill on single-shareholder companies will cover the issue of nominees of foreign companies to prevent foreigners from infringing on local businesses.

Pongpun Gearaviriyapun, director–general of the Business Development Department, said the draft would also contain provisions for the supervision of management control and takeover powers by foreigners who hire Thai citizens as nominees to buy shares on their behalf.

Only Thai citizens are eligible to register as a juristic person under the new single-shareholder companies law, she said.

The current incorporation rule requires a minimum of three promoters or shareholders for a limited company and at least two promoters for a limited partnership.

It also requires at least one director, an auditor, a memorandum of association, a statutory meeting and registration of the incorporation papers.

According to a study by the Business Development Department, most juristic persons are established with three or four directors. In practice, however, often only one shareholder truly owns and manages the company.

Ms Pongpun said the bill was included in the government’s fast-track programme and is expected to become law next year after passing through the cabinet for consideration, the Council of State and eventually the National Legislative Assembly.

The new rule will not only reduce procedures for incorporation and calling shareholders’ meetings, but also cut operating costs. Also, any one person or juristic person can be a promoter and file an application to incorporate a juristic person.

The single shareholder can hold a statutory meeting and pass resolutions as well as hold an ordinary or extraordinary general meeting and pass resolutions without the need to call for a shareholders’ meeting.

The single-shareholder company scheme may also encourage the registration of SMEs.