INDONESIA Law and Practice Contributed by: Ira A Eddymurthy and A Charlie R Malessy, SSEK Law Firm
the BOD; (d) annual report; (e) utilisation of net profits; (f) remuneration for members of the BOD and BOC; (g) delegation of management actions for the BOC under certain conditions for a certain period of time; (h) matters normally approved in an annual GMS, such as: (i) a change in any method, practice or principle of accounting, except as required by changes in Indone - sian generally accepted accounting principles (GAAP) determined by the company’s independent certified public accountant; (ii) a change to any underlying assump - (iii) the distribution or payment of any dividend or distribution in cash or in- kind of shares of capital stock of the company; or (iv) the appointment of an independent certified public accountant; or (i) increasing or decreasing the issued and paid-up capital of the company. • Super majority quorum – a GMS may be held to approve the following resolution if it is attended or represented by shareholders who own at least two-thirds of the total shares with valid voting rights, and the resolution shall be valid if approved by at least two- thirds of the total votes cast by the sharehold - ers in the meeting: (a) amendment to the company’s articles of association. • Absolute majority quorum – a GMS may be held to approve the following resolutions if it tion, method of calculation of or depreciation of any type of asset or establishment of any material reserve;
is attended or represented by shareholders who own at least three-fourths of the total shares with valid voting rights, and the reso - lution shall be valid if approved by at least three-fourths of the total votes cast by the shareholders in the meeting: (a) merger, consolidation, acquisition or spin- off; (b) submission of court petition to have the company placed in suspension of pay - ment obligations or declared bankrupt; (c) liquidation or winding up of the company; (d) extension of the company’s term (if lim - ited to a specific number of years); and (e) the sale, transfer, disposal, pledge or encumbrance of any material assets of the company that constitute more than 50% of the company’s total net assets (regardless of whether in a separate or interrelated transaction). Second and Third Meetings Where a quorum for attendance is not reached, the Company Law permits a second GMS to be held within a maximum period of ten days and no later than 21 days after the initial GMS that preceded it took place. The notice for the sec - ond GMS must be made at the latest seven days before the second GMS is held. These require - ments are also applicable for the third GMS. The quorums and approval margins provided in the Company Law for a second and third GMS are summarised in the following. Simple majority quorum With respect to simple majority quorum, for the second meeting, the quorums and approval margins are as follows: • quorum – at least one-third of outstanding voting shares; and
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