General Meeting of Shareholders in Indonesia

Rights

SSEK Indonesian Legal Consultants founding partner Ira A. Eddymurthy and Tengku Almira Adlinisa, an associate at the firm, have contributed the Indonesia chapter of the new Practical Law global guide to Shareholders’ Rights in Private and Public Companies.

SSEK Legal Consultants is one of the leading corporate and commercial law firms in Indonesia. It works with leading international and domestic companies on all aspects of their business in Indonesia. SSEK is widely experienced in the establishment of businesses in Indonesia and their ongoing operation.

The following is an extract from the Indonesia chapter of the Practical Law global guide to Shareholders’ Rights in Private and Public Companies written by SSEK Legal Consultants.

Limited liability companies (Perusahaan Terbatas (PT)) must hold an annual general meeting of shareholders (AGMS) at least six months after the end of the PT’s financial year. The AGMS must discuss and approve the annual report submitted by the Board of Directors (BOD), which must consist of at least the following:

  • Financial report.
  • Report on the PT’s activity.
  • Report on the implementation of the PT’s corporate, social and environmental responsibility activities.
  • Details of any problems that arose during the financial year that affected the PT’s business activities.
  • Report on the duties and authorities executed by the Board of Commissioners (BOC) during the last financial year.
  • Names of the members of the BOD and BOC.
  • The salaries and allowances of the BOD and BOC members during the last financial year. 
An extraordinary general meeting of shareholders (EGMS) can be convened at any time it is deemed required for the interests of the PT.

The Indonesian Company Law allows a GMS to be held by teleconference, video conference or any other electronic means.

In addition, a PT’s Articles of Association (AOA) can permit shareholders to adopt a resolution without convening a GMS, namely by way of a Unanimous Written Resolution of Shareholders (UWRS), provided that:

  • The matter to be resolved has previously been notified in writing to all shareholders.
  • All shareholders agree to and sign the relevant UWRS.

Notice, Information and Quorum Requirements for General Meetings

For PTs, notice of a general shareholders’ meeting must be delivered to shareholders no later than 14 days prior to the convening of the GMS, and the notice must be sent by registered mail and/or announced in a daily newspaper. The notice must:

  • Contain information on the date, time, place and agenda of the GMS.
  • Let shareholders know that materials for the GMS are available in the PT’s office as of the date of the notice until the date of the GMS.

The notice of a GMS can be waived if all shareholders attend the GMS and approve the resolution unanimously.

A GMS can be validly convened if attended or represented by parties holding more than one-half of the total shares with valid voting rights. If this quorum for the GMS is not reached, a notice for a second GMS can be sent informing shareholders that the first GMS failed to reach a quorum. The second GMS will be valid and entitled to adopt resolutions if attended by shareholders representing not less than one-third of all shares with valid voting rights. In the event the quorum for the second GMS is not reached, the PT can request the chairman of the relevant District Court to determine the quorum for the third GMS.

A PT Tbk must convey notification of the agenda of the GMS to the Financial Services Authority (Otoritas Jasa Keuangan (OJK)) no later than five days before the GMS announcement, which must be made at the latest 14 days before the invitation to the GMS is issued. The GMS announcement must include the:

  • Eligibility requirements for shareholders to attend the GMS.
  • Requirements for eligible shareholders to propose agenda items for the GMS.
  • Date of the GMS.
  • Date of the GMS invitation.

One or more shareholders who individually or collectively represent one-twentieth or more of the total shares with voting rights can propose GMS agenda items to the BOD of the PT Tbk at least seven days before the invitation for the GMS is issued. 
A PT Tbk must invite shareholders to attend the GMS no later than 21 days before the GMS, excluding the date of the invitation and the date of the GMS. The invitation for the GMS must at least include:

  • The venue, date and time of the GMS.
  • Eligibility requirements for shareholders to attend the GMS.
  • The agenda of the GMS with a summary of each item on the agenda.
  • A statement that the GMS agenda is available at the PT Tbk’s office or website from the date of the invitation until the date the GMS is held.

The GMS announcement and invitation must be announced:

  • In one daily newspaper with national circulation.
  • On the IDX’s website.
  • On the website of the PT Tbk.

Evidence of these announcements must be submitted by the PT Tbk to the OJK no later than two days after the announcements are made. 
A GMS will be deemed valid if one-half of shareholders holding shares with voting rights attend or are represented at the meeting. If such quorum cannot be reached, a second GMS can be held with a quorum of one-third of shareholders holding shares with voting rights. If the quorum for the second GMS cannot be reached, a third GMS can be held with a quorum as stipulated by the OJK at the request of the PT Tbk.

To read the full guide to Shareholders’ Rights in Indonesia, click here.

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