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A company has an obligation to hold a general meeting of shareholders (GMS) annually. However, if it’s deemed necessary, it is possible to hold extraordinary GMS at any time. The procedure of GMS is as follows:

Announcement of GMS Invitation

Generally, GMS is initiated by the board of directors. However, it is also possible for the commissioners or even shareholders (which represent at least 1/10 of the voting right) to initiate GMS. The board of director is obligated to hold GMS initiated by the shareholders or the shareholders could ask the court to force the board of directors to hold the said GMS (if the board of director ignored the shareholders’ request to hold a GMS for more than 15 days). 

The board of directors will have to announce the invitation for GMS. This invitation has to be announced at least 14 days before the GMS. The announcement must be in the form of registered letter and/or advertisement in newspaper. The content of the invitation must at least include these following information:

  1. Date of GMS;

  2. Place of GMS;

  3. Time of GMS;

  4. Agenda of GMS;

  5. Information on the acquirement of materials for the GMS.

Regarding the last information, the company is obligated to share the copy of materials to be discussed for the upcoming GMS. Thus, in the announcement it must be explained where and when can the shareholders acquire those materials. 

Quorum of GMS

Shareholders can attend the GMS in person or they can send representatives with PoA. The representative can be anyone, but in the event that the representative is the director, commissioner, or any other employee in the company, then they wouldn’t be allowed to give their vote on behalf of their principal. 

In order to reach quorum, at least half of the shareholders with voting right must be present in the GMS. In the event the quorum is not reached, 2nd GMS shall be held in the next 7 days which quorum will be at least 1/3 of shareholders with voting right. In the event the quorum is still not reached in the 2nd GMS, the 3rd GMS can be held in the next 7 days which quorum will be decided by the court. In the event the quorum is reached, the GMS can proceed and decisions can be taken when more than half of attending shareholders give their vote. However, the quorum for GMS with the purpose these following purposes are different:

  1. AoA amendment;

  2. Merges, Consolidations, Acquisitions;

  3. Demerges,

  4. Bankruptcy;

  5. Extension of company’s period of incorporation;

  6. Company wind up.

Specifically, for AoA amendments, at least 2/3 (1st GMS), or 3/5 (2nd quorum) of shareholders with voting right must attend the GMS and decisions can be taken when at least 2/3 of the attending shareholders give their vote. As for the other purposes, at least ¾ (1st GMS), or 2.3 (2nd GMS) of shareholders with voting right must attend the GMS and decisions can be taken when at least ¾ of the attending shareholders give their vote. 

Drafting Minutes of GMS

The result of GMS must be recorded in the form of minutes of GMS. This minute can be made in notarized deed or just a simple minute signed by the head of the GMS and at least one attending shareholders. 

Additional Obligations

Depends on the purpose of the GMS, there might be some other additional obligations, such as announcing the result to the public via newspaper (if it’s about merge, consolidation, or acquisition) and reporting the result to MoLHR (if it’s about AoA amendments). 

Circular Resolution

Normally, a GMS must be held in a certain place with a specific date and time. However, when the circumstance doesn’t allow for such meeting to happen, it is also possible to use circular resolution as substitute of GMS. In essence, circular resolution and GMS are the same. Both are medium for shareholders to give out their vote over a certain policy that the company will take. However, as there’s no physical meeting in circular resolution, the process is carried out by sending the proposed decision to every shareholder. However, unlike GMS, in order for the proposed decision to be taken, it must be approved by all of the shareholders. 

YLP Legal Consulting is a Jakarta Based Formalities and Corporate Secretarial Legal Firm.

For further queries and information, please speak with one of our consultant.

Any business entities with an investment amount of at least 500 Million are obligated to submit LKPM report to BKPM every three months (or six months for KPPA and KP3A, and annually for BUJKA). The report is done online via the LKPM Online system (previously known as SPIPISE). It is possible to use the old SPIPISE account to log into the system, however for any new business entities; they would have to register a new account at LKPM Online. These following information and documents are required to register a new account: 

  1. Type of company (Limited liability company, firm, BUMN/BUMD, etc);

  2. Company name;

  3. Legality status of the company;

  4. Type of capital investment (local or foreign);

  5. Address of the company;

  6. Company taxpayer number (NPWP);

  7. Phone and email of the company;

  8. Deed of establishment and Latest AoA, plus the respective MoLHR approval;

  9. The ID of the representative of the company (could be the director/manager, shareholder, or another authorized party), either KTP or passport;

  10. PoA of the representative (if necessary);

  11. Address of the representative;

  12. Email of the representative.

After an account has been made, the company would need to manually submit their LKPM report by filling the online form in LKPM online. The required information to fill out the form are as follows:

  1. LKPM Period;

  2. Company’s phase of business (is it still in construction or already entered production);

  3. NIB, RPTKA, Location Permit, Building Permit, Land right document, any other technical permit and tax facilities documents;

  4. Planned investment amount and the investment amount for the current period for both the fixed capital and working capital;

  5. Source of the above-mentioned capital (is it from the company’s own capital, reinvested profit, or loan capital);

  6. Information on the number of employees (divided between male and female, local and foreign);

  7. Name, position, phone number, and email of the representative of the company;

  8. Investment realization according to the business field (include the specific KBLI, product, and the investment realization amount);

  9. Information on the company’s obligation according to the field of business, including:

    • Partnership obligation;

    • Indonesian Employee training program obligation;

    • Corporate social responsibility;

    • Environmental obligation, including waste disposal obligation;

    • Any other obligation according to the respective field of business.

After the submission, the report will be reviewed by BKPM and then they would either approve it or ask for a revision if it’s deemed necessary.

YLP Legal Consulting.

YLP Legal Consulting is a Jakarta Based Formalities and Corporate Secretarial Legal Firm.

For further queries and information, contact us:

+62-21-719-6850| info@ylpconsulting.com | www.ylpconsulting.com

AoA amendment must be processed through GMS. The procedure of GMS specifically for AoA amendment is as follows:

Announcement of GMS Invitation

The board of directors will have to announce the invitation for GMS. This invitation has to be announced at least 14 days before the GMS. The announcement must be in the form of registered letter and/or advertisement in a newspaper. The content of the invitation must at least include these following information:

  1. Date of GMS;

  2. Place of GMS;

  3. Time of GMS;

  4. Agenda of GMS, which include AoA amendment;

  5. Information on the acquirement of materials for the GMS.

Regarding the last information, the company is obligated to share the copy of materials to be discussed for the upcoming GMS. Thus, in the announcement it must be explained where and when can the shareholders acquire those materials. 

Quorum of GMS

Shareholders can attend the GMS in person or they can send representatives with PoA. The representative can be anyone, but in the event that the representative is the director, commissioner, or any other employee in the company, then they wouldn’t be allowed to give their vote on behalf of their principal. 

In order to reach quorum, at least 2/3 of all shareholders with the voting right must be present in the GMS. The AoA amendment will be accepted if at least 2/3 of the attending shareholders give their vote. In the event the quorum is not reached, 2nd GMS shall be held in the next 7 days which quorum will be at least 3/5 of shareholders with voting right. The required vote for the amendment in the 2nd GMS would be 2/3 of the attending shareholders. In the event the quorum is still not reached in the 2nd GMS, the 3rd GMS can be held in the next 7 days which quorum will be decided by the court. 

Drafting Minutes of GMS

The result of GMS for AoA amendment must be recorded in either minute of GMS or notarial deed. In the event it is made in minutes, it must then be turned into a notarial deed in 30 days.  

Reporting to MoLHR

AoA amendments must be reported to MoLHR. Depends on the amendment, it might need to be approved or simply just reported. The amendments that would need to be approved are as follow:

  1. Name or domicile of the company;

  2. Purpose of the company;

  3. Period of incorporation;

  4. Authorized capital;

  5. Reduction of issued and paid-up capital;

  6. Go-public or go-private.

The AoA amendments must be reported to the MoLHR 30 days after the notarial deed has been made. However, specifically for AoA amendment regarding the period of incorporation, the report must be made at least 60 days before the end of the incorporation period. After the report has been submitted to MoLHR, the AoA amendments will be considered binding after MoLHR has issued the respective approval or acceptance. The approval/acceptance would be issued in more less 14 days.

YLP Legal Consulting.

YLP Legal Consulting is a Jakarta Based Formalities and Corporate Secretarial Legal Firm.

For further queries and information, contact us:

+62-21-719-6850| info@ylpconsulting.com | www.ylpconsulting.com

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