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Corporate Bodies - GMS, Board of Directors and Board of Commissioners
Corporate Bodies - GMS, Board of Directors and Board of Commissioners
Corporate Bodies - GMS, Board of Directors and Board of Commissioners
Npm: 2006513002
Company Organs Article 1 (2) Law 40/2007 about Limited Liability Company
General Meeting of Shareholders
Board of Directors
Board of Commissioners
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
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
Authorities:
Regulated in Chapter 7 1. Art. 92 (1) : Has the capacity to manage the company's daily
UUPT 2007 Part 1 Art. 92 - activities.
107 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
Functions: committed ultra vires
Administration/Manageme It must be according to the aim and objectives of the company (
nt Art. 2 jo Art. 15 (1) jo Art. 92 (2) )
According to acceptable policy based on UUPT 2007 and the AoA.
An office holder and not a
These includes: Skills, Available Opportunity, Common Best
worker - not employee - Pratice. etc
Therefore, no preferential 2. Authority to Represent in and outside the court: Art. 1 no 5 jo Art.
payment during liquidation 99 (1) provides that such representation shall be for and on behalf
of the company 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: Who Can't Appointed as a Director? (Art. 93 (1) )
Every member of the BD can represent the
company unless stated otherwise in the AoA 1. A person who within the past 5 years
because UUPT adopts the principle of Declared bankrupt
collegial representation Found guilty of causing the bankruptcy of a
company.
A Director Cannot Represent the Company Convicted of a crime related to finance
When:
There is a court case b/w him and the 2. Regulations of other authorized technical
company departments can regulate such.
There is a conflict of interest b/w him and the E.g: State Ministerial Regulation (Meneg BUMN No.
company (Art 92 (2) ) Per/01/MBU/2006
Therefore, a different director shall represent the Art. 3: Must have integrity, good morals, and not
company. proven to be:
Dishonest in managing subsidiary company
If all the members of the BD have conflict of
(BUMN)
interest with the company, a member of the
Breach Contract
BD shall represent the company.
If all the BC have the same conflict with the
Selfish
company, any party appointed by the GMS Violation of company principles
shall then represent the company.
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: Indemnity Right of a Director:
Any member of BD or BC shall write the Not regulated in UUPT 2007.
person to inform him of his dismissal. Art. 95 (2) In the US, under section 5 of The Model Act, a director is
Announce such dismissal in a national daily indemnified should he face any legal proceedings while
within 7 days from the day of the issuance of carrying out his duties in the interest of the company.
the letter
Inform the Minister about such dismissal, who Duties of member of Board of Directors:
shall record it in the company's record Management of the daily activities of the company (Art. 97
according Article 29 (3) No. C (2) which must be in good faith.
The elements of good faith includes:
Any legal act conducted by the member of BD
Fiduciary duty - Must be bona fide and honest
who was appointed without meeting the
Duty of act for a proper purpose - protect the workers and
requirements is legal and binding ( Art. 95 (4) ).
However, he shall be liable to replace any loss shareholders
he may have caused for the company (Art. 97 Obey statutory duty - When he goes beyond this, he
jo 104) commits ultra vire
After dismissal, any legal act he may perform Loyal to the company - Not use the company's money,
in the name and on behalf of the company is property, information for personal gain.
unlawful and he shall be personally liable for Avoid conflict of interest with the company - Not enter into
it. contract directly or indirectly with the company.
This provisions are missing in the amended
company law - UUPT 1995 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,