9 December 2019 (closed)
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An amendment to the articles of association of a limited liability company in Indonesia - a PT in case of local investment and PT PMA in case of foreign investment - must be approved by the general meeting of shareholders. Besides approval of the general meeting of shareholders, law number 40 of 2007 (Company Law) requires in certain cases also approval of the Minister of Law and Human Rights (Minister). In this column we discuss such specific amendments and we will explain the approval procedure of such amendments.
Types of Amendments of Articles of Association
According to article 21 Company Law, the following amendments require, besides approval of the general meeting of shareholders, approval from the Minister:
- the name of the company
- the place of domicile the company;
- the term of incorporation of the Company;
- purposes and objectives;
- the main business activities;
- the amount of authorized capital;
- a reduction in the issued and paid-up capital; and/or
- the change in status from private to public company or vice versa.
Any other type of amendment of articles of association does not require approval from the Minister. Such changes only need to be reported by the company to the Minister.
Notarial Deed Requirements for Amendments Articles of Association
The Company Law requires that the articles of association must be drawn up in a notarial deed in the Indonesian language. Such notarial deed must be drawn up not later than 30 days after the resolution of the general meeting of shareholders which decided such amendments. Any notification or approval request (if required) from the Minister must be submitted to the Minister not later than 30 days after the date the notarial deed has been drawn up. In case the company fails to submit the notification or approval of the articles of association within the 30 days deadline, it is required to hold a new general meeting of shareholders and obtain a new resolution.
Submission Requirements Amendment Articles of Association by Company in Indonesia
Minister regulation number 4 of 2014 regarding the Application Procedures for Approval of Ratification of a Legal Entity and Amendment of Articles of Association and Submission of Notice of Amendment of Articles of Association and Change of Limited Liability Company Data (Minister Regulation) regulates the submission requirements for both requesting approval from and sending a notification to the Minister. Unless there are specific circumstances, the approval request or notification to the ministry must be filed digitally through the legal entity information system (Sistem Administrasi Badan Hukum) of the Directorate General of General Legal Administration. The submission of a notification to the Minister includes:
- notarial deed about the amendment of the articles of association;
- the minutes of the general meeting of shareholders regarding amendment to the articles of association or a shareholders’ circular;
- photocopy Taxpayer Identification Number (NPWP);
- proof of payment of the fee for the announcement in the official gazette of the republic of Indonesia; and
- transfer receipt regarding capital of the Company, the Company's balance sheet of the current financial year, or proof of payment in another form (in case of increase of paid up capital of the company); and
- photocopies of other supporting documents from the relevant authorities.
The submission of an approval request to the Minister must include, besides above mentioned required documents, the following extra documents:
- proof of payment of:
a. fee for approval amendment to articles of association;
b. fee for approval of the use of the name of the company (in case of change of name of the company (not applicable to notification to Minister).
- evidence of the announcement in a newspaper (in case of reduction of capital); and
- photocopy of a complete description of the address or the original statement regarding the full address of the Company, signed by the directors of the Company (not applicable to notification to Minister).
The amendments of articles of association for which only notification is required to the Minister will come into effect on the date of receipt of the notification by the Ministry. The amendments of articles of association for which approval is required by the Minister will come into effect on the issuance date of a Minister’s decree, which shall be issued not later than 14 days after acceptance of the approval request by the company.
This column is provided by PNB Law Firm