Are you thinking of establishing a local company PT (Perseroan Terbatas) to do business in Indonesia? In addition to the Board of Commissioners and Board of Directors, it is mandatory and critical for PT in Indonesia to hold a General Meeting of Shareholders (GMS). GMS must be held at least six months after each financial year.
Definition and Purpose of GMS
GMS is a meeting held annually for shareholders to convey their voting rights in making decisions related to the company.
The purpose of a GMS is to discuss and approve the annual report submitted by the Board of Directors (BOD) with regard to matters affecting the company.
Generally, a GMS includes the following:
When necessary, an extraordinary general meeting of shareholders (EGMS) can also be held for the best interests of a PT. In accordance with law on Indonesian company, a PT can hold a GMS electronically via video conference and teleconference.
One thing worth noting is that a PT can forgo the GMS through the Unanimous Written Resolution of Shareholders (UWRS), permitted under the PT’s Articles of Association (AOA). The UWRS is allowed only with the following conditions:
Procedures of Conducting GMS
In order for a PT to organise a GMS, they must comply with the following procedures:
Notification of GMS Agenda
The notification of GMS agenda must be submitted to the Financial Services Authority OJK (Otoritas Jasa Keuangan) in five days prior to the GMS announcement. The GMS announcement must be made in 14 days before the issuance of the GMS invitation. The following criteria must be included in the GMS announcement:
Quorum and Voting Requirements for GMS
As mentioned earlier, a GMS can only be held when it is attended by members with valid voting rights and more than 50% of the total shares.
A second GMS is needed if this quorum for the GMS is not achieved. In this case, shareholders must be informed that the first GMS failed to reach the quorum. Then, the second GMS will only be valid when not less than one-third of all shares attend the GMS. If again the quorum of second GMS is not met, a PT can ask the relevant District Court’s chairman to decide a new quorum for the third GMS.
If you require assistance with PT establishment to start your business in Indonesia, feel free to reach out to us. We will guide you through the process, every step of the way of your business journey in Indonesia.
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