Indonesia’s Corporate Structure
According to Indonesia’s Company Law, all limited liability companies must have shareholders, a board of commissioners and, a board of directors. Each of these roles has different responsibilities in the company.
Shareholders in an Indonesian Company
Shareholders are the company owner. The shareholder of Indonesian company can be a foundation, a company, or an individual. The shareholder has the final say when it comes to decision making. If there are any changes in the company, such as transferring shares, increasing or reducing the company’s paid-up capital or authorized capital, changing of business location or business activity, changing the business entity (from the public to private, and vice versa), and the incorporation period for the company, approval must be received from the shareholders. If the company needs to appoint, replace, and dismiss directors, shareholders will be the person in charge to do so as well.
Any of these changes must be decided during the shareholders’ general meeting. To ensure the validity of the changes, the shareholder’s general meeting must meet the following requirements:
- At least 50% of the shareholders with voting rights must attend the meeting. If the shareholder is absent, he/she can assign a representative with a legitimate power of attorney to sit in on behalf of him/her.
- If less than 50% of the shareholders can turn up at the meeting, shareholders have the right to hold another meeting between 10-21 days. Only 33% of the voting shareholders need to sit in for this meeting.
Shareholders’ Liability in Indonesia
Should the company incur a loss, the shareholders are not accountable for the company’s losses that exceed the value share they possess. Even if the company faces a lawsuit, the shareholders are not personally guilty of the charges.