EKEH CELESTINE CHIGOZIE

CORPORATE BODIES: General Meeting of Shareholders,

Board of Directors & Supervisory Board

Npm: 2006513002
Company Organs Article 1 (2) Law 40/2007 about Limited Liability Company
General Meeting of Shareholders
Board of Directors
Board of Commissioners

Article 1 (2) Law No. 11/2020 about Job Creation

General Meeting of Shareholders
Board of Directors
Board of Commissioners

Regulated in Chapter VI - Article 75 - Article 91 Law No. 40/2007

which replaces No. 1 year 1995 about Limited Liability Company.
General Meeting of Shareholders:
ART. 1 (4) JO ART. 75 (1) AND ART. 1(4) JO
ART. 153E AND 153J OF PART 5 UUCK ABOUT
PT

This organ possesses the authority that other organs of the company
doesn't possess. Generally, every other authority not possessed by the
Board of Directors and Board of Commissioners are could be found
on the GMS. This could be likened to the theory of separation of
power. Therefore, no organ is greater than the other.

They are natural persons and shall not be liable to the actions
done in the name and on behalf of the company, and their
liability to the loss suffered by the company shall not be
beyong what he has invested in the company.
 Authorities of The General Meeting of Shareholders

Art. 13 (1): To assent to the rights and obligations arsing from pre contractual agreement
conducted by the founders prior to the company's legal status approval by the Minister
Art. 14 (4): Approve legal acts performed by the BD and BC together with the founders prior to the
obtaining of legal status by the company
Art. 19 (1): Determine the amendment of AoA of the company
Art. 38 (1): Approve the repurchase or transfer of shares by the company
Art. 39 (1): Delegates some of its authority to the BC to implement the resolution of the GMS to
repurchasing or transferring shares announced by the company
Art. 41 (1): Approve the increment and/or reduction of the company's capital
Art. 64 (1) jo (3) : Approve the work plan of the company according to the stipulations of the AoA
Art. 69 (1) : Approve the annual report, ratify financial statements, and the supervisory task of by
the Board of Commissioners
Art. 71 (1) : Approve the utilization of company's profits and allocation of reserve funds
Art. 92 (5): Approve the assignment of management task to the Board of Directors
Art. 94 (1): Appoint the Members of the Board of Directors
Art. 96 (1): Determine the salaries and allowances of the BD
Art. 99 (2) No. C : Appoint another party to represent the company if all the members of BD and/or
BC have conflict of interest with the company
Art. 102 (1) : Approve the transfer of company's assests and its use as security for loan by
BD
Art. 104 (1) : Approve the filing for bankruptcy to the commercial court by the BD on behalf
of the company
Art. 105 (2) : Discharge any member of the Board of Directors
Art. 106 (7) : Uphold the decision of the BC to suspend a member of the Board of Directors
Art. 111 (1) : Appoint members of the Board of Commissioners
Art. 113 : Determine the salaries and allowances or honorarium and allowances of the
Board of Commissioners
Art. 120 (2) : Appoint Independent Commissioners
Art. 123 (3) : Approve Merger plan drawn up by the Board of Directors.
Art. 127 (1) jo Art. 87 (1) jo Art. 89 (1) : Approve Merger, Consolidation, Acquisition or
Segregation by the Company
Art. 142 (1) No. A : Approve the dissolution of the Company
Art: 143 (1) : Acknowledge the responsibilities of the liquidator after the liquidation process
Where GMS can Meet:
ART5 (1) JO ART. 76 (1) & (3)

Their meeting must be held in the Company's head office which must be within the
territory of Indonesia

For a Public Owned Company, the GMS may be held at the domicile of the stock
exchange where its stock are listed for trade.
However, the GMS may be held at any location within the territory of Indonensia as long
as the whole shareholders agree, and are present and has a certain agenda.

The GMD can also be held electronically but in accordance with the number of quorum
and decision taking conditions as enshrined in the law and/or AoA (Art. 77 (1)

Quorum and decision taking for ordinary agenda = More than 1/2 (one half) of the total
shareholders with valid voting rights are present while the decision shall be valid when
it is agreed by more than 1/2 (one half) of the votes cast (Art. 86 (1) jo Art 87 (2)
ART. 88 UUPT 2007

Quorum and decision taking for agenda to amending

AoA = 2/3 (two third) are present and decision shall valid
when agreed by at least 2/3 of total votes cast

Quorum and decision taking for agenda for Merger,

Consolidation, Acquisition or Segregation, Filing and
approving bankruptcy, extending the term or dissolution of
the company = At least 3/4 (three fourth) are present and
decision shall be valid if agreed by at least 3/4 of total votes
cast.

Art. 77 (4) UUPT 2007:

The minutes of the GMS held electronically shall
beapproved and signed by all the shareholders unlike the
conventional meeting that is only signed by the chairman
and one other person appointed from and by the
shareholders.
TYPES OF COMPANY MEETING:

ANNUAL MEETING AND OTHER MEETINGS (ART. 78 (1)

Art. 79 (1) UUPT 2007

Annual meeting must be held at least
Other/Extra Ordinary Meetings shall be
every six months after the end of each
conducted by the director alongside
financial year. Of which the director shall
the GMS in the event that there is the
submit:
need for a meeting in the interest of the
Financial Report comapny.
Report of the company's activities
Report on the CSR
Art. 79 (2) UUPT 2007
Problems encountered during the
financial year One or more shareholders and Board of Directors shall
Report on the BC supervisory task summon for the General meeting of Shareholders
Identity of the BD and BC
Salaries and allowances of BD and BC

Reasons to Summon for a Meeting:
Failure of the Director to
conduct annual meeting
Expiration of the tenure of the
Board of Directors and/or
Board of Commissioners
Other reasons, e.t,c
The Summon shall be addressed
to the Board of Directors in
writing and the copies extended
to the Board of Commissioners
Art. 79 (5) UUPT 2007:
The directors must summon for GMS at most 15 days after
receiving the request
If the directors refuse to summon for GMS, the shareholder
(s) may request for the GMS again but to the Board of
Commissioners
If it was the BC who requested for the GMS in the first place,
they may go ahead to summon for the meeting.
However, during the meeting, the BD is obliged never to
deviate from agenda listed in the request for the GMS
If both the BD and BC refuses to summon for a meeting after
15 days of receiving the request, the shareholder(s) have the
right to file a petition to a court of competent jurisdiction to
enable him/them summon for GMS (Art. 80 (1) )
Though the petition is voluntair, the ruling of the court shall
be inter parte and not ex parte in that court shall summon the
BD and BC before issuing an order for the shareholders to
summon a GMS.
The burden of proof shall be on the
shareholders to:

That the Board of Directors and Board of

Commissioners failed on their The Summon for GMS must be in writing and
responsibility served to all the shareholders or advertised in a
That the shareholders truly represents National Daily.
1/10 of shares with voting rights It must contain sufficient information about the
That the reason for the summoning of intended meeting whose memo shall be available
the meeting is proper at the company's office for the shareholders

It shall also contain the date, venue, time, and
The inter parte rule by the court shall be final and agenda of the meeting
closed to legal remedy. The dictates of the dictum
shall be abided with, and the agenda of the meeting This is to enable any shareholder to decide whether
shall not be deviated from during the meeting. to attend the meeting or not even though he shall be
bound by the outcome of the meeting whatsoever.
However, if the application is rejected by the court, the
shareholder(s) can proceed for a cassation at the
Supreme Court, and the outcome of the Supreme
Court shall be final whatsoever. They can't go for
judicial review.
 VOTING RIGHTS:
Art. 84 (1): The general principle of one share
one vote is applied unless stated otherwise in
the AoA
Shares owned directly/indirectly by the company
has no voting rights (Art. 40 UUPT 2007)
The voting right is the final control that the
shareholder has in contributing to the decision that
be taken by GMS
A shareholder may be represented by a different
party by giving such party a PoA
A shareholder cannot split his vote by giving a PoA
to different persons (Art. 85 (3) ). This is to maintain
the principle of deliberation to reach consensus
However, custodian banks/security companies
can give who represent different shareholders can
give different votes.
MINUTE TAKING: ART. 90 UUPT 2007
This is imperative otherwise such meeting shall be
considered to have never existed. This may be
made in a notarial deed and shall be signed by the
chairman or one or more shareholder appointed
from and by the GMS to ascertain the genuineness
of the minutes of the GMS.
CIRCULATION RESOLUTION: Decision may be
taken outside the GMS provided that all the
shareholders agree to the decision and signed
in writing. This is legal, binding and
enforceable (Art. 91)
Board of Directors
COMMON LAW SYSTEM:

They don't recognize Board of Commissioners but only Board of

Directors and General Meeting of Shareholders;

Board of Directors:
Chief Execute Officer (CEO) - Manages the daily activity of
company
Chairman - They act as non-executive directors
Shadow Directors - Protects the interest of the workers
Permanent Directors - They are appointed for life and are
majority shareholders
Alternative Directors - They are temporal and perform
certain functions based on delegated power

Regulated in Chapter 7
UUPT 2007 Part 1 Art. 92 -
107
Functions:
Administration/Manageme
nt
An office holder and not a
worker - not employee -
Therefore, no preferential
payment during liquidation
of the company
Authorities:
1. Art. 92 (1) : Has the capacity to manage the company's daily
activities.
This must be for the company's interest. Therefore, he cannot use
the company's assets for his personal interest. There must not be
any form of conflict of interest between him and the company.
When this happens, he is considered to have abused his office or
committed ultra vires
It must be according to the aim and objectives of the company (
Art. 2 jo Art. 15 (1) jo Art. 92 (2) )
According to acceptable policy based on UUPT 2007 and the AoA.
These includes: Skills, Available Opportunity, Common Best
Pratice. etc
2. Authority to Represent in and outside the court: Art. 1 no 5 jo Art.
99 (1) provides that such representation shall be for and on behalf
of the company. It is a statutory representation. He may authorize
anyone to perform such function on his behalf without approval
by the GMS (Art. 98 (3). However, the AoA or the GMS may
stipulate or decide otherwise.
 Who can Represent:
Every member of the BD can represent the
company unless stated otherwise in the AoA
because UUPT adopts the principle of
collegial representation
A Director Cannot Represent the Company
When:
There is a court case b/w him and the
company
There is a conflict of interest b/w him and the
company (Art 92 (2) )
Therefore, a different director shall represent the
company.
If all the members of the BD have conflict of
interest with the company, a member of the
BD shall represent the company.
If all the BC have the same conflict with the
company, any party appointed by the GMS
shall then represent the company.
Who Can't Appointed as a Director? (Art. 93 (1) )
1. A person who within the past 5 years
Declared bankrupt
Found guilty of causing the bankruptcy of a
company.
Convicted of a crime related to finance
2. Regulations of other authorized technical
departments can regulate such.
E.g: State Ministerial Regulation (Meneg BUMN No.
Per/01/MBU/2006
Art. 3: Must have integrity, good morals, and not
proven to be:
Dishonest in managing subsidiary company
(BUMN)
Breach Contract
Selfish
Violation of company principles
 To Appoint Member of The BD
2. Technically Competent: He must be -
Art. 94 (1) : The GMS shall appoint the Board of
Knowledgeable
Directors. This authority cannot be delegated to
Experienced and have expertise other organs of the company and not even the
Capable to strategically manage a developing court can do that.. However, the founders can do
company that during the formation of the company.
Conversant with management issues
Dedicated to duty The method is by simple majority vote of all votes
Intelligent and emotionally balanced cast by the GMS, and the board of directors must
Not a member of a political party be elected individually.
Not above 55 years old when appointed a director of
a subsidiary company If there is any change of a member of the BD, the
Not holding a public office or should resign from Minister shall be informed within 30 days, so that
such position he can record it in the company's record.
Not occupying any office that can arouse conflict of
interest Appointment of a member of BD that doesn't
meet the requirement is considered invalid, null
If he meets all these requirements, he shall prove and void by law. Art. 95 (1) jo Art 93.
it through a letter or the concerned department,
which shall be saved by the company. This must be proven based on Art 164 HIR jo Art
1866 of Civil Code
When Such Happens:
Any member of BD or BC shall write the
person to inform him of his dismissal. Art. 95 (2)
Announce such dismissal in a national daily
within 7 days from the day of the issuance of
the letter
Inform the Minister about such dismissal, who
shall record it in the company's record
according Article 29 (3) No. C
Any legal act conducted by the member of BD
who was appointed without meeting the
requirements is legal and binding ( Art. 95 (4) ).
However, he shall be liable to replace any loss
he may have caused for the company (Art. 97
jo 104)
After dismissal, any legal act he may perform
in the name and on behalf of the company is
unlawful and he shall be personally liable for
it.
This provisions are missing in the amended
company law - UUPT 1995
Indemnity Right of a Director:
Not regulated in UUPT 2007.
In the US, under section 5 of The Model Act, a director is
indemnified should he face any legal proceedings while
carrying out his duties in the interest of the company.
Duties of member of Board of Directors:
Management of the daily activities of the company (Art. 97
(2) which must be in good faith.
The elements of good faith includes:
Fiduciary duty - Must be bona fide and honest
Duty of act for a proper purpose - protect the workers and
shareholders
Obey statutory duty - When he goes beyond this, he
commits ultra vire
Loyal to the company - Not use the company's money,
property, information for personal gain.
Avoid conflict of interest with the company - Not enter into
contract directly or indirectly with the company.
These acts acts are not null and void by law but are voidable.
 Dismissal of a member of BD:
Full Responsibility -Duty
care/Prudential duty - In doing
business, signing cheque, delegating
power. However, based on the Resignation of a Director: Art. 107 UUPT 2007
principle of business judgement risk,

he shall bot be liable for honest

mistakes of judgement or error This procedure shall be regulated in the

judgement because mere AoA. However, according to the
imprudence is not negligence explanation of Art. 107, he shall send a

letter of resignation to the company

Duty to be diligent and skilful -
within a reasonable time after which he
According to his knowledge and skill -
reasonably diligent in all shall automatically resign without
circumstances approval from the GMS

Board of Directors are jointly and

severally liable - Art. 97 (4) UUPT 2007 -
This provision wasn't provided in UUPT
1995 and KUHD
 Dismissal of a member of BD:
A member of the Board of Directors shall be
dismissed based on the decision of the GMS. Such
dismissal shall specify the reasons, which may
include:
That the person does no longer fulfil the condition
to become a director
Committed acts which are detrimental to the
company
However, the person shall be given the opportunity
to defend himself in the GMS. If the decision to
dismiss that person was taken in an extra ordinary
meeting of the GMS. the director concerned shall
be informed about such plan in advance and shall
be given the opportunity to make a defence before
such decision should be taken
The director shall not be given the opportunity to
make a defence if he doesn't not challenge such
decision (Art. 105 (1,2,3 and 4) UUPT 2007)
A member of the BD can be suspended by
the Board of Commissioners. But they state
the reasons for such suspension
This shall be done by writing to the
concerned member of the Board of
Directors. When this is done, he shall seize
to manage or represent the company
Within 30 days, there shall be a meeting of
the GMS where the concerned director
shall be given the opportunity to make a
defence (Art. 106 (4,5,6) UUPT 2007
If such decision is upholded by the GMS,
his suspension shall remain permanent but
if it is nullified, he shall be allowed to
resume his duties.
 BOARD OF COMMISSIONERS
Regulated in Chapter 7 Part 2 - Art. 108 - 121
ART 108 (1.2,3) UUPT 2007
The BC supervises the management of the company
and the implementation of the company's policy and
gives advice to the Board of Directors for the interest of
the company (Art. 1 No. 6 UUPT 2007)
They are made up of one or more shareholders of the
company. (Art. 108 (1) (2) (3) UUPT 2007
They shall not act separately but works together for the
interest of the company (Art. 108 (5) (6) UUPT 2007
If the business of the company is conducted under
Syariah principles, there shall be Syariah supervisory
board appointed by the GMS on the recommendation
of the MUI to advice the Directors on Syariah principles
(Art 109 (1,2,3) UUPT 2007
The existence of the BC was facultative in
KUHD but was made imperative in UUPT 1995
(Art. 1 No. 2 jo Art. 94 (1) ), which even stipulated
that any company whose business is the
mobilisation of public funds and issuance of
promissory notes must have at least two
members of BC to protect public interest.
This provisions was further adopted in UUPT
2007
APPOINTMENT OF THE MEMBERS OF THE
BOARD OF COMMISSIONERS
It must be a natural personal
with legal capacity (Art. 93 (1) )
THOSE THAT CANNOT BE APPOINTED: THOSE
WHO WITHIN THE PAST 5 YEARS WERE -
Declared bankrupt
Member of the Board of Directors or
Board of Commissioners that were
found guilty of bankrupting a
company
Found guilty of a crime
A technical department may provide
additional regulations as was found in the
appointment of Board of Directors
Qualification of the requirements provided
in the regulations shall be proved with a
letter made by the person or the technical
department concerned, which shall be
stored by the company
They shall be appointed by the GMS (Art. 111 (1) UUPT
2007)
However, the founders shall appoint them during the
formation of the company through a notarial deed
made in the presence of a public notary
They shall be appointed for a certain period and can be
re-appointed. The method for their appointment,
change, dismissal and/or dismissal shall be regulated in
the AoA
The GMS shall be also state the time their appointment,
change, and/or dismissal is effective.
Failure to state this shall make these events effective
from the time the GMS is closed (Art. 111 (7, 8 UUPT
2007)
Appointment of a member of BC who doesn't meet the
necessary requirement is null and void by law (112 UUPT
2007). When this happens, other members of the BC or
BD who shall send him a letter informing him about his
dismissal, and the Minister shall be informed about this
for his records.
This too shall be announced in a national daily. (Art. 112
(2) UUPT 2007)
Legal Actions of BC
Every legal actions he may have
done in the name of the
company before his dismissal
remains legal and binding on
the company.
However, the losses caused for
the company by such conducts
shall be his personal liability (Art.
112 (3,4) UUPT 2007
The salaries and allowances and
honorarium of the members of
BC shall be determined by the
GMS (Art. 113 UUPT 2007)
In performing their duties, they
shall do so in good faith, duty of
care, full responsibility as in the
case of the BD (Art. 114 (1, 2)
UUPT 2007)
Liability of the BC
Every member of the BC shall
be personally and solitary liable
for the loss caused to the
company by any member of
the BC (Art. 114 (3,4) UUPT
2007). However, he may be
discharged of this liability if he
proves that:
He doesn't have, directly or
indirectly, any personal interest
over the conduct of the director
which led to such loss
He had advised the director to
avoid any form of conflict of
interest with the company that
could have led to such loss (Art.
114 (5) UUPT 2007
Liability of the BC
In the event of bankruptcy
caused by the negligence or
Add a little bit of body text
fault of a member of BC, every
member of the BC including
the member of the Board of
Directors shall be personally
and solitary liable to clear the
debts if the assets of the
company is insufficient to
close those debts.
Any member of the BC and/or
BD shall be exempted from
this liability if he proves the
same conditions stated above.
 Administrative functions of the BC: Other Functions: Art. 117 UUPT 2007
Rights of the Shareholders:
A shareholder who represents 1/10
of the total shares with valid voting
rights have the legal standing to
sue any member of the BC whom
as a result of his negligence or fault
the suffered loss (Art. 114 (6) UUPT
2007)
Dismissal of the BC:
The provisions for the
dismissal of a member of
the Board of Directors in
Art. 105 applies mutatis
mutandis to the dismissal
of a member of the Board
of Commissioners.
Prepare minutes of the
meeting of the BC - This shall
be contain all the discussions
on the meeting and they shall
be store the copies but the
original copy shall be stored by
the BD
Report the number of shares
owned by the shareholders to
the company. They shall also
report any changes in respect
to that by any member of the
BD and/or any member of his
family
Report their supervisory
activity for the financial year to
the GMS. This shall be fome in
the annual meeting of the GMS
and not in any of the extra
ordinary meeting of the GMS
The BC can assist the BD in
special legal acts. This authority
is different from the
constitutional authority given to
the BC.
However, if this is not regulated
in the AoA, the BC shall be
exempted from performing such
legal acts. These special legal
acts includes approving and
rendering help to the BD in
carrying out some legal actions.
This shall be done in writing
writing. It could be concerning
internal or external affairs of the
company.
.
Dismissal of the BC: Delegate Commissioner
The provisions for the dismissal of a member of
This shall be appointed from among
the Board of Directors in Art. 105 UUPT2007 members of the Board of Commissioners.
applies mutatis mutandis in the dismissal of a His functions shall be regulated in the AoA
member of the Board of Commissioners. of the company, and shall not contravene
the authorities of the Board of
Commissioners nor prejudice the functions
Independent Commissioner (Art. 120 UUPT 2007) of the Board of Directors. Presentasi adalah alat
komunikasi yang dapat
This shall be an independent person that has no Committe: digunakan sebagai
media penyampaian
affiliation with the company. He shall be Based on Art. 121 UUPT 2007, theperagaan,
BC cankuliah,
form a
appointed by the GMS based on his integrity and committee from the member of the BC
ceramah, to help
laporan, dan
lainnya. Umumnya,
credibility in carrying out their supervisory functions. They
presentasi disampaikan
To maintain Good Corporate Governance, he shall shall be answerable to the Board
di hadapan audiens.of
truly be a third party that has no affiliation Commissioners.

whatsoever with any of the shareholders,

The committee shall comprise of:
member of the BD and/or member of the BC
Audit Committee
Good Corporate Governance constitutes
Remuneration Committee
transparency, accountability, fairness, and
Nominated Committee
responsibility.
This is an autonomy right possessed by the
This appointment is not imperative.
BC and which the BD shall not infere with.