In pursuing its external growth, it is common for a company to merge with or acquire other companies. This generally takes the form of either an amalgamation of relevant entities or a transfer of one entity’s assets or shares to the other entity.
In Thailand, the concept of amalgamation is explicitly recognised and stated in the Civil and Commercial Code (CCC) and refers to a merger of two or more companies to form a new one. In this respect, employees of the amalgamated companies are undeniably valuable assets. However, in reality, employees of the amalgamated companies may not wish to continue working for the new company. Questions arise as to how best to deal with employees in a case of amalgamation.
According to Section 1243 of the CCC, the new company will receive all rights, duties and liabilities from the amalgamated companies (which are to be dissolved) after the amalgamation. Consequently, a strict interpretation of Section 1243 could mean that the employees of the amalgamated companies should be automatically transferred to the new company.
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