A Summary on Indonesian Company Law

Every company in Indonesia must duly establish in compliance with Law Number 40 of 2007 on Limited Liability Companies (“Company Law”) along with other laws and regulations or rules which regulates kind of such companies, investment model and industries specialization.

Essentially Company Law regulates the following:-

– Establishment and it is procedures

– Capital and Shares

– Work Plan, Annual Report and employ of Profits

– Social and Ecological Responsibilities (Mandatory obligation for company getting business activities in the area of and/or associated with natural sources)

– General Meeting of Shareholders

– Board of Company directors and Board of Commissioners

– Merger, Consolidation, Acquisition, and company Split

– Inspection of Company and

– Dissolution, Liquidation, and Termination of Company’s Status as Legal Entity.

The Organization Law is recognized as an “umbrella” provisions for each company that runs its business in Indonesia as well as other specific laws and regulations which regulates specific consideration.

In Indonesia there’s two kinds of company, that are:-

– Public Listed Company (Tbk) – Governs legally 8 of 1995 on Capital Market and

– Private Company.

Public Listed Company means the organization offers its securities (stock/shares, bonds/loans, etc.) for purchase to everyone, typically via a stock market, however Private Clients are on the other hand (don’t offer its securities for purchase to everyone).

With regards with investment model there’s two kinds of investment model for Indonesian company, that are:-

– Foreign Direct Investment and

– Local Investment (both governs legally 25 of 2007 on Investment).

With regards with company which capital of the Condition, such company also must adhere to Law 19 of 2003 on Condition Owned Enterprise.

For particular company industry, there are lots of laws and regulations and regulation governs such company, for example:-

– Banking Industry (Governs legally 10 of 1998 on Bank)

– Insurance Industry (Governs legally 2 of 1992 on Insurance Industry)

– Telecommunication Industry (Governs legally 36 of 1999 on Telecommunication)

– Mining Industry (Governs legally 4 of 2009 on Mineral and Coal Mining)

– Plantation Industry (Governs legally 18 of 2004 on Plantation)

– Etc.

There’s also other laws and regulations that regulates company in the relation with 3rd party, for example: –

– Transactional matters (Governs by Indonesian Civil Code, Mortgage Law, Fiduciary Law and Taxation Law)

– Employment Law (Governs legally 13 of 2003 on Manpower)

– Etc.

Comments are closed.