Government relief measures on holding Annual General Meeting (AGM) of Juristic Person under COVID-19 situation

In Brief
Due to the current COVID-19 situation in Thailand is effectively controlled and prevented by the government, consequently, the measures on restrictions of activities of Juristic Person have been relieved for public and business sectors to operate daily transactions continuously.
Therefore, the Juristic Person who is required, according to the law, to appoint the shareholders and related attendees to attain the Annual General Meeting (AGM) would be able to hold the meeting with physical presence of the shareholders and attendees in the meeting or participate the juristic person’s activities in venues. This is one of the activities which has been eased and be allowed to proceed. Notwithstanding, the protection and suppression policies on COVID-19 spreading issued by the government shall still be followed and implemented in a proper manner.

Key Takeaways
On 2 November 2020, the Department of Business Development (“DBD”)) has announced a notification regarding the setting up of Juristic Person’s meeting re: Setting up the Annual General Meeting of Juristic Person under prescriptions of Section 9 of the Emergency Decree (No.10, B.E. 2548).
The key objective of this notification is to repeal the previous notification concerning the postponement for setting up the Annual General Meeting which was announced on 4 March 2020 during an intense spread of COVID-19 in Thailand.

Recommended Actions
The Notification will be enforced on 1 December 2020 onward and any limited company, public company limited, scheduled the date of fiscal year on (or prior) 31 July 2020 and has not been held the company Annual General Meeting, are obliged to proceed as follows:
1) Annual General Meeting should be held in the period commencing from now on until 30 November 2020 and the juristic person is also required to file the list of shareholders and financial statement by the timetable below:

Type of Legal Entity Meeting Filing the List of Shareholders Filing the Financial statement
Company Limited Within 4 months from end of fiscal year date Within 14 days from the Annual General Meeting of Shareholders Within 1 month from the day that financial statement has been approved by the General Meeting
Public Company Limited Within 1 month from the ending date of the meeting
Association Within 120 days from end of fiscal year date Within 30 days from the general meeting date

2) In the event that the company is unable to set up the Annual General Meeting in time, the company must file the Letter of Explanation to the DBD to explain the reason of not setting up the Meeting. The Letter may be submitted online or hand over directly at the DBD office or Offices of Business Development (zone 1-6) or any Provincial Commercial Offices before 4 January 2021.

Conclusion
The balance-sheet must be submitted to the General Meeting for approval within four months as from its date. In case that the company fails to submit the balance-sheet to the Meeting on time as prescribed, it shall be punished by paying a fine for 6,000 Baht and the director shall also pay a fine for 6,000 Baht per person.
Should you have any further inquiries or require any assistance, please let us know.
Yours sincerely,

Somphob Rodboon

Managing Partner
somphob.r@ilawasia.com
ILawAsia Co., Ltd.

Nattaya Mahakunakorn

Associate
nattaya.m@ilawasia.com
ILawAsia Co., Ltd.


Myanmar Government Implements Economic Relief Measures

Myanmar Government Implements Economic Relief Measures

11 May 2020

The Myanmar Government on 27 April 2020 released its COVID-19 Economic Relief Plan (CERP), which aims to mitigate the inevitable economic impact posed by COVID-19. The CERP’s seven Goals for responding to the crisis, each with detailed Action Plans, will impact all aspects of economy – from international trade and investment to private households and employment.

The seven Goals set out in CERP are as follows:

  1. Improving the macroeconomic environment
  2. Easing the impact on the private sector through improvements to the banking, investment and trade sectors
  3. Easing the impact on laborers and workers
  4. Easing the impact on households
  5. Promoting innovative products and platforms
  6. Strengthening the health-care system and
  7. Increasing access to the COVID-19 response financing including contingency funds

Key Action Plans of each Goal are briefly as follows:

1.Improving the macroeconomic environment

  • Lower interest rates (by at least 3.0%) and lower minimum reserve requirement on banks have recently implemented by Central Bank of Myanmar (“CBM”).
  • The CERP also prescribes that the CBM shall conduct credit auctions as necessary to inject more liquidity into the banking and financial sector.

 

2.Easing the impact on the private sector through improvements to the banking, investment and trade sectors

  • Providing MMK 100 billion 1-year working capital loans to improve working capital of affected Myanmar Small and Medium Enterprise (“MSMEs”) in the CMP and hotel/tourism sectors at 1% interest rate per annum.
  • Defer corporate income tax and commercial tax payments, due in March and June 2020, to September 2020
  • Waiver of the 2% Withholding Tax on exports
  • Exemption of customs duties, commercial tax, and specific goods tax imposed on the importation and distribution of medical supplies and products related to the prevention, control, and treatment of COVID-19
  • Three- to six-month exemption from lease fees for impacted firms that have leased state-owned factories for manufacturing, and that have made regular payments in the past three months
  • Permission for commercial banks to restructure and reschedule existing loans extended to SME businesses for longer repayment periods (up to a maximum of three years)
  • Waiver of import licensing and FDA requirements, as long as the products are FDA approved in another country

 

3.Easing the impact on laborer and workers

  • Extending healthcare benefits for unemployed social security members from six months to 1 year from the date of unemployment and medicine and travel benefits from six months to 1 year from the date of unemployment.
  • Implementing labor-intensive community infrastructure projects for those laid off, or returning migrants.

 

4.Easing the impact on households

  • Electricity tariff exemption
  • Unconditional cash and in-kind transfers for vulnerable households
  • Emergency rations through community-based food banks and association
  • Negotiation with private financial institutions to give more flexibility related to interest and mortgage payments for households which are most negatively affected by the COVID-19 pandemic

 

5.Promoting innovative products and platforms

  • Promoting the use of available mobile payment services and usage of e-Commerce and Social-Commerce Systems

6.Strengthening the healthcare system

  • Immediately extending and improving quarantine centers/facilities
  • Immediate importation of key medical products
  • Improving preventive measures and health sector human resource capacity
  • Upgrading existing health facilities

7.Increasing access to the COVID-19 response financing including contingency funds.

  • Reallocation of Myanmar’s 2019-20 budget as much as practically possible up to 10% from all government entities to the COVID-19 Fund
  • Improve budget flexibility and responsiveness through modernization of budget reallocation rules
  • Increase access to COVID-19 -related development financing through acquiring significant increases in external development finance

 

The CERP also establishes clear and specific assessment indicator for each Action Plan. The form and content of the CERP suggest that Myanmar is well on its way to becoming a regular player on the stage of world economy. For businesses, Myanmar is certainly one to watch.

THE AUTHORS

 

 


Company new Registration under Myanmar Law

Since Union of Myanmar has decided to promulgate the new Myanmar Company Law (“MCL”) on 1st August 2018, there are some issues that have to be concerned by an investor whose company is incorporated under the previous law (Myanmar Company Act. 1914)

  • The companies that were incorporated under the previous law have to be re-registered under the MCL.

The New Myanmar Company Law requires all existing companies to be re-registered with the Directorate of Investment and Business Administration ("DICA") under the provision of the MCL from 1 August 2018 and no later than 31 January 2019; otherwise the company may be revoked from the record.

However, DICA has prepared an online system called Myanmar Company Online System (“MyCO”) to support all entrepreneurs who owned a company or willing to incorporate their company in Myanmar. MyCO will start to be operated on the same day of the promulgation of the MCL.

  • Amending some of the significant rules.
    • MCL let the foreign investors to invest in local company up to 35 percent.

    Under the previous law (Myanmar Company Act. 1914), all Local Company are defined as (a company) 100% owned by Myanmar Citizen. Therefore, the foreigner is not allowed to participate in the ownership of the local register company.
    Therefore, any citizen of another nationality wishes to incorporate a company to manage his business in Myanmar, must establish his own company as a foreign company as his right may be limited by any applicable law.
    Nevertheless, the MCL will come up with alternation of definition for the foreign company as a company that is directly or indirectly owned by foreigners for more than 35 percent which mean the foreigners can hold up to 35 percent of local company’s shares and still be defined as a local company.

    • Qualification of the shareholders and directors

    MCL states that every company must have at least one shareholder and director and at least one of the directors must be “ordinarily resident” which mean a person who is a permanent resident of the Union under an applicable law or is resident in the Union for at least 183 days in each 12 month period commencing from the date of commencement of the MCL for the company registered under the previous law, and from the date of registration of the company for the company registered under the MCL.

    • Revocation of company’s object

    According to the previous law, every company must declare its object in the Memorandum of Association. This object determines the company's authority to make or take an action on other people or companies.
    The company must not undertake or perform actions that exceed their object of being registered with the registrar. However, the new MCL will revoke this objective requirement by defining that the company registered in MCL will no longer have to declare its object.
    Therefore, the company will have the power to performance any kind of commercial activity provided that it complies with this law and any other applicable law.

    • The replacement of Memorandum and Article of Association

    Previously, the Memorandum and the Article of Association are significant documents that must be filed with the conservator of the company during the registration process. The MCL does not require applicants to file these documents, but only have to file the company's Constitution during the registration process.
    The Company's Constitution is a document that establishes the administrative rules of the company. Furthermore, the Constitution determines a relationship between shareholders, directors and other members of the company.
    In conclusion there are two important steps that must be made by entrepreneurs who have owned or own a company in Myanmar
    First, they must try to understand to comply with the law, so that they can properly manage their business for their best interest of the company.
    Secondly, they have to re-register their company to the DICA before 31 January 2019. Otherwise, their company ( and business ) could be revoked.