CHAPTER 1
Formation of a Company and Application for a License

Section 8. The finance business or the credit foncier business may be undertaken only by a limited public company formed under the law on limited bublic companies and after a license from the Minister has been obtained.

A formation of a limited public company or a limited company under the first and the second paragraph may be effected only after approval of the Minister. Such approval may be granted with such conditions as the Minister may prescribe.

An amalgamation of companies shall be deemed to be a formation of a limited company.

The application for and the granting of a license shall be in accordance with the rules and procedures and subject to the payment of fees as prescribed in ministerial regulations.

Section 9. A license under Section 8 may be granted with such conditions as the Minister may prescribe.

The Minister, after approval of the Cabinet, may amend, change or make any addition to the conditions prescribed under the first paragraph when he deems it necessary for the safety or welfare of the public, and may prescribe that the conditions as amended take effect after the expiration of any specified period of time.

Section 10. A company may have a branch office only after authorized by the Minister.

The application for and the granting of such authorization shall be in accordance with the rules and procedures prescribed by the Minister.

Such authorization may be granted with any condition as the Minister may prescribe.

Section 10. bis. Any person wishing to act on behalf of a company established under foreign laws by setting up a representative office in the Kingdom must obtain the authorization of the Bank of Thailand. Such authorization may be granted with any condition.

The provisions of Section 13 and Section 52 shall not apply to the person authorized under the first paragraph.

Chapter ll
Finance Companies

Section 11. No person other than a finance company shall engage in the finance business.

Section 12. A finance company shall use a name which includes the words
“finance company” at the beginning and the word “limited” at the end.

Section 13. No person other than a finance company shall, in the conduct of its business, make use of the name or the description of “financing”, “investment”, “credit”, “trust”, “finance” or any other word or words having the same meaning except commercial banks or representative offices of foreign banks under the law on commercial banking.

Section 14. A finance company shall have a registered capital and a paid-up capital in such amounts as prescribed by the Minister, each of which amounts shall not be less than sixty million bath.

No person shall hold more than ten per cent of the total amount of a finance company’s shares sold except in the case where shareholders are government agencies, state enterprises under the law on the Bank of Thailand, or juristic persons established under the provision of a specific law. In the even that it is necessary to rectify the condition or operation of a finance company, the Bank of Thailand with the approval of the Minister shall have power to permit the holding of shares as otherwise, Such permission may be granted with any condition.

Shares of a finance company held by the following persons or partnerships shall be regarded as shares held by the person under the second paragraph:
(1) the spouse of the person under the second paragraph;
(2) a minor child of the person under the second paragraph;
(3) an ordinary partnership in which the person under the second paragraph or a person under (1) or (2) is a partner;
(4) a limited partnership in which the person under the second paragraph or a person under (1) or (2) is a partner with unlimited liability or in which one or more of such persons is a partner or are partners with limited liability in an aggregate amount exceeding thirty percent of the total capital of such limited partnership;
(5) a limited company in which the person under the second paragraph or a person under (1) or (2) or a partnership under (3) or (4) holds shares, separately or in combination, in an aggregate amount exceeding thirty per cent of the total amount of such limited company’s shares sold; or
(6) a limited company in which the person under the second paragraph or a person under (1) or (2) or a partnership under (3) or (4) or a limited company under (5) holds shares, separately or in combination, in an aggregate amount exceeding thirty per cent of the total amount of such limited company’s shares sold.

Section 15. No finance company shall dispose of its shares to a person if such disposition will cause any person to hold shares in a percentage greater than that prescribed under Section 14.

Section 16. Ordinary shares and preference shares of a finance company shall be of the kind with name certificates, having a par value of not more than on hundred bath per share. The Articles of Association of a finance company shall not have any restriction regarding transfer of shares, except for the purpose of compliance with this Act or with the law on limited public companies.

Section 17. The amount of shares of a finance company held by persons of Thai nationality shall not be less than three-fourths of the total amount of shares sold and the number of its directors who are persons of Thai nationality shall not be less than three –fourths of the total number of directors. In the event that it is necessary to rectify the condition or operation of a finance company, the Minister with the recommendation of the Bank of Thailand shall have power to permit the number of shareholders or directors otherwise. Such permission may be granted with any condition.

Section 18. Where it appears that an acquisition of shares of a finance company causes any person to hold shares in a percentage greater than that prescribed in Section 14, that person may not hold the shares in excess of the prescribed percentage against the finance company and the finance company shall not pay dividend or any pecuniary benefit on the excess shares to such person, or allow such person to exercise voting rights on the said shares
at shareholders meetings.

Section 19. For the purpose of compliance with the second and the third paragraphs of Section 14, Section 17 and Section 18, a finance company shall examine its register of shareholders prior to a shareholders meeting and prior to each distribution of dividend or any pecuniary benefit, and shall inform the Bank of Thailand of the result of such
examination in the particulars and within the period of time prescribed by the Bank of Thailand. In the case where any shareholder is found to hold shares in excess of the percentage prescribed in Section 14, the finance company shall so notify such person so that he may take steps to dispose of the excess shares.

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