Shareholders are those who subscribed to and paid the capital of the company. They are technically the owners of a company which runs a business in Indonesia, and therefore at the highest position in the hierarchy of the company in Indonesia. They are on top of decision-making through the general meeting of shareholders (GMS).
In Indonesia, the Board of Commissioners (BOC) is there to supervise management policies. They also advise the members of the Board of Directors (BOD) who are usually the shareholders, following IndonesiasnCompany Law regulation.
As it is clearly stated in Indonesian Company Law, a PT PMA must have at least a minimum of 2 shareholders at all times. The shareholders can be individuals and/or legal entities of Indonesia or foreign countries.
Every shareholder must have Rp. 10 million worth of shares. However, let’s say if the company obtains its legal entity status and the number of shareholders becomes less than two people, then within the period of lesser than six months, the shareholders is obliged to transfer part of their shares to other intended shareholders or the company shall issue new shares to the other intended shareholder.
However, if the time stipulated has exceeded 6 months and the number of shareholders are still less than two person, the remaining shareholder shall be personally liable for all agreements and legal matter, which may include the company’s loss.
Different from other countries, all corporate shareholders in Indonesian PT PMA must have Articles of Association (AoA), which is approved by a public notary.
A PT PMA is not required to have a local shareholder if their industry is not mentioned in the negative investment list. Therefore, 100% , or the total shares of a PT PMA capital can be owned by foreigners or a foreign investment. If the field of business in listed in the negative investment list, there will be a special rules stated that the PT PMA must have specified percentage of local Indonesian shareholders.
Shareholders have authority not given to the BOD or BOC within limits specified in the Indonesian Company Law (40/2007) on Limited Liability Companies or the Articles of Association (AoA).
As it states, an Indonesian company shareholder(s) cannot be held liable for any legal relationships entered into on behalf of a company, by the company or by the directors.
They can’t be held liable for any of the company’s losses that exceed the shares they partake. This basically safeguards the personal interests of the shareholders. Therefore a bank account of the shareholder is in safe hands.
Also, their liability is up to the capital statement letter (even if funds have not been actually transferred) – as per the issued amount of shares stated on the Article of Association (AoA).
Classifications of Shares in an Indonesia Incorporation
- Shares with or without voting rights
- Shares with rights to receive more dividend
- Shares with rights to propose BOD and BOC members
Rights and Obligations of Shareholders in Indonesia
- Attend and cast a vote at the GMS
- Receive dividend payments
- In addition, shareholders will exercise other multiple rights under the Indonesian Company Law (40/2007) on Limited Liability Companies.
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