Background
Based on Article 8 paragraph (1) of Law Number 40 of 2007 on Limited Liability Company (“Company Law”), it is stated that a deed of establishment must contain the articles of association (“AoA”) and other information in relation to the establishment of the Company. AoA is the document that contains the internal regulations and the management of the Company.
The Content of the AoA
According to article 15 of Company Law, the AoA shall contain at least:
(i) the name and domicile of the Company;
A name is required to identify the Company. The name of the Company must not endanger fair competition; it has to respect regulations about intellectual property and especially marks. Furthermore, aCompany must have its domicile in the territory of Republic of Indonesia, which shall constitutes as its headquarter. This domicile of the Company is stipulated in AoA. The Companies must have an address in accordance with its domicile. This address shall be used for correspondence with other party
(ii) the purposes and objectives and field of business of the Company;
It is important to mention the purposes and objectives as well as the field of business of the Company in AoA. The mentioning of the purposes and objectives and the field of business of the Company in AoA held the principle function. In other words, the purposes and objectives and the field of business of the Company are the “legal foundation” for the operator of the Company.
(iii) the Company’s period of incorporation;
According to Article 6 of Company Law, a Company is established for a limited or unlimited term as specified in the AoA. Furthermore, according to Article 9 paragraph (1) of Company Law, it is stated that to obtain the Decree with regards to the ratification of the Company as a legal entity from the Minister of Law and Human Rights (the “Minister”), the founders of the Company shall jointly submit an application to the Minister electronically via legal entity administration system information technology services, filling in a form that contain the defined period of incorporation of the Company as one of the informations that should be contained in the form.
(iv) capital of the Company;
the AoA shall contain the amount of the authorised capital, issued capital, and paid up capital.
(v) shares of the Company;
the AoA shall contain the number of shares, classification of shares (if any), including the number of shares for each classification, the rights attaching to each share and the nominal value of each share.
(vi) Board of Directors (BOD) and Board of Commissioners (BOC) of the Company;
the AoA shall contain the name and position and number of members, the procedures for the appointment, replacement, and dismissal of members of the BOD and BOC of the Company.
(vii) General Meeting of Shareholders (“GMS”);
The AoA shall contains the determination of the place and procedure for holding a GMS.
(viii) dividends of the Company;
The AoA shall contain the procedure for the use of profits and allocation of the dividends of the Company.
Apart from the aforementioned provisions that shall be contained in the AoA, the AoA may also contain other provisions in accordance with the Company Law.
Stephanie Portier
