How to transfer share ownership of an Indonesian Company?

Transferring ownership of an Indonesian company is a complicated process that must be carried out with extreme caution to avoid any potential difficulties. An Indonesian firm is owned in the form of shares. As a result, when shareholders sell their stock, they are selling a portion of their rights to the company’s ownership.

A Sales and Purchase Agreement must be executed before the share transfer in Indonesia may proceed. Many Indonesian business owners mistakenly think this phase ends the share transfer process, but this is incorrect.

The Indonesian company’s share ownership has not yet been transferred to the new shareholder.

What are the Share Transfer Requirements in Indonesia

Before transferring any shares, all shareholders of limited liability companies in Indonesia must meet specific requirements outlined in Article 57, paragraph 1 of Law No. 40 of 2007 (commonly known as the Company Law).

• One of them is that stockholders must first offer their shares to other shareholders in the same firm before selling them to anybody else.
• An Indonesian company’s shareholders must first obtain the company’s consent before selling any of their shares.
• Approval from the governing authorities, by current Indonesian rules and regulations, will also be necessary.

These requirements are the same no matter the type of business entity. The transfer of the shares will be made official once these procedures have been met.

The procedure of Transferring the Shares of an Indonesian Company

The transferring of shares of an Indonesian company is governed by Article 56, paragraph 1 of the Company Law.

It states that all share transactions in Indonesia must:

• Be completed with the execution of a share transfer document.
• A written copy of the deed of share transfer must be provided to the corporation.
• After all parties have signed the share transfer document, there are a few additional steps to take before the shares can be officially transferred.
• The transfer of rights to the company’s shares must first be registered by the board of directors.
• The date of the share rights transfers must be indicated when doing so.
• Within 30 days of the signing of the deed, the Board of Directors must notify any approved.

Understanding Share Transfer and Ownership in Indonesian Companies

The shares are not automatically transferred even after the purchasers and sellers of the shares have signed the deed of share transfer. This is because, according to Article 612 of the Indonesian Civil Code, such transfers must be made through a single change of ownership, which must be completed by the owner or someone acting on their behalf.

As a result, ownership rights to the shares will not be transferred to the buyer of the shares until after they have been delivered. The distribution of a share certificate to the buyer of the shares makes such transactions official.

Owning shares of an Indonesian company is a way for one to own part of a company based in Indonesia. However, those who would rather have full control over the company should incorporate one.