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Commissioners and Directors in an Indonesian Company

Commissioners and Directors

In any company based in Indonesia, commissioners and directors are some of the most important people involved in the running of the company. This is because they have the authority to perform certain tasks which nobody else within the company would be able to. No company can be run properly without first having hired suitably qualified and able people to fill these vital roles. There are also certain laws and requirements which are related to the roles of commissioners and directors in any company in Indonesia. Every company owner will have to become familiar with all information pertaining to commissioners and directors in Indonesia to avoid any possible complications which could otherwise have been avoided. 

 

Commissioners in an Indonesian Company 

A commissioner of an Indonesian company will be part of its board of commissioners. The primary task of the board of commissioners is that of the supervision of the company. They do so by providing supervision and advice to the members of the board of directors. The board of directors will subsequently use the advice given by the board of commissioners to run the company in the most effective way possible. Commissioners also approve the annual financial statements of a company. Another duty of commissioners is that of reviewing the budget to be used during the next financial year. Commissioners are not deemed to be part of the company’s daily management. Although commissioners are allowed to own some of a company’s shares, this is not a requirement; one can become a commissioner even without owning any company shares. Every action taken by a commissioner is to be in line with what has been stipulated in the company’s articles of association. 

 

Requirements of Commissioners in Indonesia

Every company based in Indonesia is required to have a minimum of one commissioner. Companies which have multiple commissioners are to select one of them for the role of president commissioner. The president commissioner, as is implied by the title, serves as the leader of the board of commissioners. 

A commissioner is not always required to be a resident or citizen of Indonesia. A commissioner who is neither a resident nor a citizen may be selected if the prospective non-resident commissioner is not currently serving as a resident commissioner in another Indonesian company. Should the commissioner in question be a foreigner who has a work permit which is valid in Indonesia and the work permit is sponsored by a different company, the commissioner will require another work permit 

If you are a foreigner who requires a work permit or work visa of any sort so that you can work in Indonesia, we at Paul Hype Page & Co can be of assistance. We will work with you to ensure that you receive your work permit in as simple and smooth a manner as possible. We will also see to it that all regulations are followed in every step from application to the obtaining of the work permit. 

Any company which is completely owned by Indonesians is not allowed to hire a foreigner as the company’s commissioner. 

 

Commissioners and Suspensions of Directors 

Should it be deemed necessary, commissioners in an Indonesian company through the company’s board of commissioners have the power to impose a temporary suspension on any member of the board of directors. Such suspensions are regulated by Indonesia’s Law Number 40 of 2007. Once the board of commissioners has provided the reasons for the director’s suspension and informed the director to be suspended in writing, the director will be duly suspended and is therefore prohibited from carrying out any directorial duties during the period of the suspension. Within 30 days of the beginning of the suspension, a general meeting of shareholders (GMS) must be held. The director who has been suspended may offer a personal defense during this GMS. At the conclusion of the GMS, the commissioners will choose to either uphold or withdraw the suspension. A non-decision on the part of the commissioners or a failure to hold a GMS within the prescribed time period will be regarded as equivalent to a withdrawal of the suspension; therefore, such an outcome will permit the suspended director to return to the directorial role. 

 

Directors in an Indonesian Company 

In an Indonesian company, directors are part of the board of directors. The board of directors oversees all matters related to the management of the company. All decisions made by the directors of the company are to be in line with the company’s articles of association and all relevant company laws in Indonesia. The articles of association also mention the duration of which a director is to be in the position. Members of the board of directors are to be selected, replaced, or even dismissed during a GMS. 

 

Requirements of Directors in Indonesia 

Every company based in Indonesia is to have at least one director. Companies which have more than one director are to select one of these directors for the role of president director of the company. The president directors, as is implied, is the leader of the directors. The liabilities and responsibilities of all of an Indonesian company’s directors are to be determined by using the methods of common corporate structures in Indonesia. In many situations, such determinations are made during a GMS. 

 

Responsibilities of Directors 

Directors are to be the legal representatives of a company. The manner in which they are to do so will be specified in the company’s articles of association. A director of an Indonesian company also has certain important responsibilities to be fulfilled. Among these responsibilities are the following: filing of compliances, submission of financial statements, preparation of an annual work plan before the beginning of a company’s fiscal year, signing of contracts between third parties and the company, management of the company’s bank account, submission of the company’s financial statement and yearly report, and maintenance of the list of shareholders as well as the minutes of any GMS. However, a non-resident director is not permitted to sign documents on the company’s behalf. Only directors who are residents of Indonesia may do so. 

 

Liabilities of Commissioners and Directors in an Indonesian Limited Liability Company 

In any limited liability company, those who are to take responsibility for liabilities will have these liabilities divided in such a way so as to provide fair outcomes for all. For this reason, commissioners and directors are both saddled with different liabilities in an Indonesian limited liability company. 

The liabilities of the members of the board of commissioners are specified in Article 108, Paragraph (1) of the Company Law. If the company were to suffer financial losses, the commissioners who were directly involved with those losses will be held accountable if it can be determined that they conducted their duties in a manner which was negligent, irresponsible, unethical, or contrary to the stipulations specified in the company’s articles of association. In cases which see more than one director being at fault, this liability is to be imposed equally and jointly upon each commissioner concerned. However, if there is sufficient evidence that the commissioners carried out their supervisory duties in the company’s best interest and in accordance with the company’s business objectives, they do not have any vested interests in the board of directors’ actions, and they provided the board of directors advice to prevent losses from occurring, then the commissioners will not be held liable for the losses. 

The liabilities of the members of the board of directors are specified in Article 97, Paragraph (3) of the Company Law. They are determined in a similar way as the liabilities of commissioners. If it can be proven that directors who were directly involved with the financial losses of a company acted in a way which could be deemed to have been objectionable and contrary to the goals of the company, they will be made liable for these losses. Similar to the rules regarding liabilities imposed on commissioners, when multiple directors are to blame for the losses suffered by the company, all directors involved are to have the liability imposed equally and jointly upon them. However, if there is sufficient evidence that the financial losses suffered by the company were not caused by the negligence or poor judgement of the directors, the directors carried out their managerial duties in the company’s best interest and in accordance with the company’s business objectives, they do not have any conflict of interest with regard to the managerial actions which directly led to the financial losses, and they attempted to prevent the financial losses concerned from taking place, then the directors will not be held liable for the losses. 

In any case, if your company has been enduring financial hardship, regardless of whose fault the losses were, you should contact us at Paul Hype Page & Co. We will help your company overcome any losses previously suffered by helping you formulate a sound financial plan. This plan should lead your company to improved profit levels so that it will once again earn revenue that will benefit both you and your company alike. 

 

Conclusion 

Competent and responsible directors and commissioners are important in leading any Indonesian company to success, whether financially or otherwise. The board of directors and board of commissioners ought to work together to ensure the continued well-being of the company. By doing so, the company will become stronger, more profitable, and more respected by the public. Furthermore, the tasks that can only be performed by commissioners and directors are crucial to the company’s success. Thus, even though their roles may differ, commissioners and directors are equally important to any company in Indonesia. 

 

Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.

Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia

Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.

 

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Posted on August 16, 2019 at 5:53 pm
Categories: Uncategorized

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