The most well-known and sometimes challenging obligation for a limited-liability company in Indonesia is to perform the Annual General Meeting of Shareholders (“Rapat Umum Pemegang Saham Tahunan”) conducted in the registered address of the Company. It is a well-known and common concept for company to perform the AGMS annually at the end of the financial year. Based on Indonesian Law and Regulation, Law No. 40 of 2007 concerning Limited Liability Company:
General Meeting of Shareholders is a structural organ of a Company that is entitled to authorities not provided to Board of Directors or Board of Commissioners within the limitation as stipulated based on the governed Law and Regulation and/or the Articles of Association of the Company.
It is then acknowledged, based on its definition, the GMS is a part of a structural organ within the Limited Liability Company which process is defined as follow :
- GMS is categorized into Annual GMS and other GMS
- Annual GMS is compulsory to be performed at the maximum 6 months after the end of the financial year
- Within the Annual GMS, all documents regarding annual reporting of the Company’s activities must be provided
- Other GMS may be conducted from time to time in accordance to the necessity on behalf of the Company.
See below the usual agenda to be recorded when performing the Annual GMS, based on Article 78 of Company Law, Law No. 40 of 2007 :
- Financial Statement of the previous financial year included within : the profit and loss report, cash flow report and equity change report alongside with the remarks of the intended financial statement
- Activity Report of the Company
- Conduct of corporate social responsibility and environmental responsibility of the Company
- Details of issues that affected the activities of Company during the previous financial year
- Report on supervising duty of the Board of Commissioners during the previous financial year
- Full names of the Board of Directors and Board of Commissioners of the Company
- Remuneration and benefits for the Board of Directors and Board of Commissioners and/or allowances during the previous financial year.
Furthermore, the result of AGMS’ agendas must be provided in written and commonly known as the Minute of Meeting of AGMS. Then is it compulsory to have AGMS be adjusted to notarial form? The minute of meeting of AGMS is required to be made showing the acknowledgement of the agenda previously presented in the AGMS and signed by the head of meeting and at least signed by 1 of the appointed shareholders and by the attendees of AGMS. The signatures are only required if the minute of meeting is not made in notarial form. From here onwards, the misconception will be cleared that the minute of meeting is not required to be made in notarial form by the Company.
However, it is in the usual practice that the Company would want the minute of meeting be made in notarial deed, the reason is so it can be acknowledged as a valid legal document with verifiable and binding legal force. But bear in mind, the minute of meeting may not be made in 2 separate forms. If you have complied to proceeding the AGMS and made the minute of meeting by manual documentation, you are allowed to convert the document through waarmerking/registration of document in the Public Notary.
Andalan Consulting provides you with the updated compliance obligations for business owners and investors. If you have further concerns regarding a particular issue while performing your business in Indonesia, please do not hesitate to contact us here.