Page 199 - Social Enterprise A New Business Paradigm for Thailand

specific procurement. 164 . However, the actual benefit still depends largely on the discretion and
awareness of government agencies regarding whether to apply specific procurement procedures

to social enterprises.

5.4) Fundraising through Share Issuance by Limited Companies as Social Enterprises

The Securities and Exchange Act, B.E. 2535 (1992), prohibits companies from offering shares
unless authorized by the Securities and Exchange Commission (SEC). Under the Civil and
Commercial Code, the offering of shares by a limited company, whether by the company itself or

its shareholders, may not be made publicly or to the general public unless exempted or conducted
in accordance with the rules, conditions, and procedures prescribed by the Capital Market
Supervisory Board. 165 .

To reduce fundraising barriers and costs, the Capital Market Supervisory Board issued a regulation
exempting limited companies registered as social enterprises from these restrictions, allowing
them to publicly offer shares or offer them to a broad audience. This exemption applies both to
shares issued by the company and to shares offered by its shareholders and has been in effect
since February 1, 2020 166 . As a result, social enterprises, whether organized as limited companies

or public limited companies, and their shareholders can raise funds by issuing and offering shares
to the public without needing to submit applications, disclosure forms, or documents to the SEC.
However, they must be certified as social enterprises by the Office of Social Enterprise Promotion
(OSEP) under the Social Enterprise Promotion Act, B.E. 2562 (2019), and must adhere to good

corporate governance principles as specified by the Office 167 .

At the time of this report, only one or two social enterprises had been able to benefit from this
support measure (see Box 6.3, Dhamma Business Co., Ltd.). For most social enterprises, which
are typically small businesses, challenges in fundraising for business expansion remain.
Furthermore, as noted earlier, even though investors who purchase or hold shares in social
enterprises are eligible for personal income tax deductions, if the shares are transferred before
the enterprise ceases operations, or if the social enterprise loses its registered status within five

164 Ministerial Regulation Prescribing the Monetary Thresholds for Procurement by Specific Methods, Procurement
Without Written Contracts, and Procurement for the Appointment of Inspectors, B.E. 2560 (2017), given on August
23, 2017.
165 Securities and Exchange Act, B.E. 2535 (1992), Section 33 and Section 34.
166 Notification of the Capital Market Supervisory Board No. TorJor. 1/2563 on the Exemption of Share Offerings by
Limited Company Social Enterprises Made Generally or to the Public at Large, dated January 10, 2020.
167 SEC News, Tuesday, February 4, 2020 / No. 24/2563, “SEC Allows ‘Social Enterprises’ to Offer Shares to the Public
Without Seeking Approval or Filing,” Source: https://www.sethailand.org/sec-se-2020/, February 4, 2020.
166