THE FOLLOWINGS ARE THE PROCEDURE TO HOLD A GENERAL MEETING OF SHAREHOLDERS
The General Meeting of Shareholders (“GMS”) is a Company Organ in a Limited Liability Company. The provisions regarding the procedures, quorum and other requirement to hold a GMS in a Limited Liability Company are regulated under the Law No 40 of 2007 regarding the Limited Liability Company (“UUPT”).
GMS pursuant to Article 1 paragraph 4 UUPT, defined as a company organ in a Limited Liability Company holding the authority not conferred upon the Board of Directors or the Board of Commissioners within the limits determined under the UUPT and/or the Articles of Association of the Company.
There are two type of GMS under the UUPT, namely the Annual GMS and other GMS which also commonly referred as Extraordinary GMS. The Annual GMS must be held within 6 months after the end of each financial year of the Company. Whereas other GMS (Extraordinary GMS) can be held at any time depending the interest and needs of the Company.
Request to hold the GMS
Before convening a GMS the Board of Directors must send summons or invitation to the shareholders.
The Board of Directors shall convene the GMS, however in a certain situation, the GMS may be conducted by the Board of Commissioners, in the event that the Board of Directors does not convene the GMS or by the Shareholders, with the order from the Head of the District Court having jurisdiction over the Company domicile, in the event that the Board of Directors and the Board of Commissioners does not convene the requested GMS.
1 (One) or more shareholders who jointly represents at least 10% of total shares with valid voting rights may request the Company to hold a GMS. Such request must be submitted to the Board of Directors in the form of registered letter accompanied with the reasons thereof.
Upon received of the request to hold GMS, the Board of Directors call the GMS and send invitation of the GMS at the latest within 15 (fifteen) days after the receipt of such request. In the event that the Board of Directors fail to issue the invitations of the GMS within the period as regulated, then the shareholders can re-submitted the request of GMS to the Board of Commissioners, by which the Board of Commissioners shall call the GMS and send the invitations of the GMS at the latest within 15 (fifteen) days after such request is received.
In the event of the Board of Directors and the Board of Commissioners does not call the GMS and fail to send invitations of the GMS within defined period, then the shareholders who request the GMS can file application to hold a GMS to the Head of the District Court whose jurisdiction covers the Company’s domicile. The application shall be filed along with supporting documents and evidence on the reasons and requirement, otherwise the application might be rejected by the District Court if the shareholders cannot prove the reasons and requirements to support the application.
Quorum of the GMS
GMS may be held if it is attended or represented by more than ½ (half) of the total shares with valid voting rights, unless if higher quorum is required under the UUPT or the articles of association of the Company. If the quorum is not reached, then the invitations for the second GMS may be issued and must indicate that the first GMS was held and the quorum was not reached. The second GMS can be held if fulfil the quorum of at least 1/3 (one third) of the total shares with valid voting rights.
The shares controlled by the Company itself may not be used to cast a vote in the GMS of the Company and will not be taken into account in determining the quorum of the GMS. The shares controlled by the Company shall include the shares controlled by the Company through repurchasing of the shares by the Company, transfer by law, grant, or grant of will, or shares controlled by its subsidiaries or another company whose shares are directly or indirectly owned by the Company.
In principle, the resolution of the GMS must be adopted through deliberation to reach consensus, therefore, if the consensus decision can not be reached, then the resolution can be adopted if approved by more than ½ (half) of the total vote casts. In respect to the voting threshold requirement, either the Articles of Association of the Company and the UUPT may stipulate greater number of votes for GMS or resolution which is related the basic or fundamental matters of the Company such as the existence as well as the continuance of the Company, for example: the amendment of the Articles of Association, merger, acquisition, consolidation of the company, dissolution and liquidation, filing of bankruptcy petition of the Company, etc.
In respect to the amendment of the Articles of Association of the Company, if the Articles of Association of the Company does not specify a greater quorum, then the GMS must be attended or represented by at least 2/3 (two third) of the total shares with valid voting rights. For which the resolution must be approved at least by 2/3 (two third) of the total votes casts.
Furthermore, to approve the merger, acquisition, consolidation, demergers, filing of petition to be declared bankrupt, extension of duration, and dissolution and liquidation of the Company, if the Articles of Association does not specify a greater number of quorum, then GMS can adopt the resolution if at least ¾ (three fourth) of the total number of shares with valid voting rights are present or represented in the GMS and the resolution is approved by at least ¾ (three fourth) of the votes casts.
The minutes of the GMS must be made and signed by the Chairman of the meeting and by at least 1 (one) shareholder appointed by and from among the participants of the GMS. The signing of the minutes of the GMS by the Chairman and at least 1 (one) shareholder appointed by and among the participants of the GMS is intended to guarantee the certainty and correctness of the contents of such minutes of the GMS.
Author: Adella Izzati Samiya
Editor: Andry Yudistira
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