Shares Inheritance Follow Up

Short-Memo

The rationale of prohibition of inheritance waiver under Art. 57(2) Company Law and the
inheritance right of the heir pursuant to Article 833 of ICC is acknowledged in the Islamic Law
Compilation (“KHI”). Article 174(2) provides that family members that qualify as heirs have the
right to inherit.

However, under Islamic law, the heir cannot reject the ineritance. Based on the principle of
Ijbari, wherein the transfer of the assets of inheritance towards the heir automatically
commences in accordance with God’s will irrelevant of the interests of the person inheriting or
the heir. This principle is embodied in Articles 183 and 187 of the KHI where both articles
require for the inheritance to be shared. In order to overcome this situation, the heir has to be or
become a non-muslim.
 PMA to PMDN Status Conversion

The conversion will be pursuant to the Investment Coordination Body Regulation No. 4 of 2021
(“PBKPM 4/2021”). This new procedure was created from the issuance of the Investment
Coordination Body Regulation No. 14 year 2021. This conversion procedure also simultaneously
follows the Online Single Submission (“OSS”) mechanism pursuant to Government Regulation
No. 5 of 2021 (“PP 5/2021”)

In order to convert from PMA to PMDN, the company must conform to the following steps:
1. A company shall update its company data in Online Singe Submission (“OSS”) when the
company changes its status from PMA to PMDN [Art. 57(4) PBKPM].
2. The update in company data shall include at least the following changes:
a. Name or citizen identity number;
b. NPWP;
c. The status on whether it is a PMA to PDMN or vice versa;
d. Structure of management;
e. Intent and purpose;
f. Company address and/or email
3. Then, the OSS system will validate the shares ownership composition to the legal entity
administration system under the Ministry of Law and Human Rights [Art. 57(5) PBKPM
4/2021].
4. If there are inconsistencies between the OSS System and administration system under the
Ministry of Law and Human Rights, the company shall firstly validate the data in the
administration system under the Ministry of Law and Human Rights [Art. 57(11)
PBKPM 4/2021].
5. After the validation, the OSS will record the change of status from PMA to PMDN [Art.
57(6) PBKPM 4/2021].
6. This conversion will also change the Registration Number (NIB) of the company as the
registration number consists of data of the company’s profile, capital and ownership [Art.
177 PP 5/2021]