Legal Obligations of an Indonesian Company
Under the Indonesian Company Law,
All directors cannot be declared bankrupt in the past five years prior to the appointment
Members of a board of directors (BOD) or board of commissioners (BOC) cannot be found to be at fault in causing a company to be declared bankrupt
Board of directors (BOD) or board of commissioners (BOC) cannot be sentenced for a crime that caused losses to the state and/or a crime related to the finance sector
Foreign nationals are prohibited from serving as human resources directors and there are a number of other directorships positions that foreign nationals are prohibited from holding under the employment laws and regulations.
The Minister of Manpower Decree No. 40 of 2012 regarding Certain Positions Should Not be Taken by Foreign Manpower (MOM Dec 40/2012) sets out various company positions related to personnel and industrial relations that cannot be taken by foreign nationals.
The BOD and its members are not liable for the acts taken for and on behalf of the company, but the member(s) of the BOD and BOC can be personally liable for the losses of the company, if it can be proven that the loss resulted from the fault or negligence of the BOD or BOC.
Parent company’s Liability According to Company Law
The parent company can be liable if one of the following applies:
The subsidiary no longer fulfils the requirements to be a legal entity.
Parent companies used the subsidiary for their own interests in bad faith.
Parent company is directly involved in an unlawful act committed by the subsidiary.