The regulation on Extraordinary General Meeting of Shareholders (“EGMS“) is set forth in Chapter VI Article 78 paragraph (1) and Article 78 paragraph (4) of Law Number 40 of 2007 on Limited Liability Company (“Company Law”).
Article 78 paragraph (1) states that:
“General Meeting of Shareholders (“GMS“) consists of the annual GMS and other GMS.”
In the elucidation, states that:
“The meaning of other GMS in practice is often known as the extraordinary GMS.”
Article 78 paragraph (4) states that:
“Other GMS may be held any time based on the need for Company’s interest.”
Based on both of articles, it may be said that the EGMS is one of GMS implementation forms. It is different to the annual GMS that may only be held every year, the EGMS may be held whenever the company’s interest needs it. For example, if the company wants to change the composition of board of directors or board of commissioners, name, domicile, period of company establishment, and other things that require an approval of shareholders.
Under Article 79 paragraph (1) of Company Law, board of directors has the function and authority to implement EGMS, with prior an invitation of GMS. However, the EGMS may be held based on the shareholders’ or the board of commissioners’ request. The shareholders may consist of 1 (one) or more shareholders who together represent 1/10 (one tenth) or more than the total shares with voting rights, unless the article of association specifies a smaller amount (Article 79 paragraph (2) letter a). The request is filed by shareholders or the board of commissioners to the board of directors with a registered letter and its reason. The copy of registered letter is delivered to the board of commissioners.
Within a maximum period of 15 (fifteen) days from the date of GMS implementation request is accepted, the board of directors shall convene the GMS. In the matter of the board of directors do not convene the GMS, then:
a. GMS implementation request which is filed by shareholders, will be re-submitted to the board of commissioners; or
b. Board of commissioners is inviting the GMS itself.
If the GMS implementation request is filed by shareholders to the board of commissioners, then the board of commissioners shall convene the GMS at the latest time of 15 (fifteen) days from the date of GMS implementation request is accepted.
The procedures of EGMS implementation are the same as the procedures of GMS implementation. Therefore, the reader can see the procedures of EGMS in the article on the General Meeting of Shareholders.
Alsha Alexandra Kartika
