Merger: Thai Cabinet approves new form of Business Integration
BANGKOK- Thailand's Cabinet this week approved a Bill amending the Civil and Commercial Code to allow a merger (Company A + Company B = Company A or Company B) as another method of business integration.
Lawyers Baker McKenzie says that, currently, Thai corporate law recognifses only amalgamation, the combination of businesses under which both of the combining entities cease to exist and another new entity is deemed incorporated by virtue of law (i.e. Company A + Company B = Company C).
"Unlike amalgamation, in a merger one of the two combining companies will survive the merger process while the other company will be deemed cease to exist," BM says.
"The surviving company will assume assets, liabilities, rights, obligations, and responsibilities by virtue of law.
"A merger would, among other benefits, provide more flexibility in licensing and permits requirements when compared to the combination of entities through amalgamation given that the new entity (Company C) is practically required to reapply for licenses and permits that the two combining companies have already held."
BM says the minimum number of promoters and shareholders in private limited companies will be reduced to two (as opposed to three currently).