Both a foreign investment limited liability company (PT PMA) and local investment limited liability company (PT) must be established by two or more shareholders according to Article 7 of law number 40 of 2007 (Company Law). The shareholders can be individuals and/or legal entities of foreign or Indonesian nationality. In this column we will deepen the minimum requirements as set by the Company Law for shareholders in foreign and local limited liability companies.
Minimum Amount of Shareholders in PT PMA/PT
After company establishment, the Company Law requires that any Indonesian limited liability company at least maintains a minimum of two shareholders (article 5 Company Law). If at any given time the amount of shareholders becomes less than two shareholders, then, within six months after such event:
1. the remaining shareholder must transfer a part of his shares to a third party; or
2. the Indonesian limited liability company must issue new shares to third parties.
In the event neither the company nor the shareholder performed any of the abovementioned actions, and as a result of that, the shareholders are less than two shareholders after the six-month period has lapsed:
1. the remaining shareholder will become personally liable. The shareholders will become liable to all legal relationships and losses of the company which arise after the above mentioned period of six months has lapsed; and
2. any party carrying an interest in the company may request court termination of the Indonesian limited liability company. Such parties include the shareholder, the public prosecutor, the Board of Directors, the Board of Commissioners, the creditors, the employees and other stakeholders.
Exemption to the Minimum Requirement on the Amount of Shareholders Requirement
The abovementioned requirement on the minimum amount of shareholders in an Indonesian limited liability company is not applicable to certain kinds of companies, which, due to their special status, are not required to have a minimum of two shareholders.
Based on article 7 (7) Company Law, the following companies are exempted from the minimum shareholder requirement:
1. Fully state owned limited liability companies; and
2. Companies which are operating a securities exchange, depository and settlement institutions, clearing and guarantee institutions, and other stated in the Law on Capital Markets.
Due to the nature of the companies stated in abovementioned article, it is obvious that the vast majority of both foreign and local investment limited liability companies (PT/PT PMA) are required to fulfill the minimum amount of shareholders as required by the Company Law.