The regulation of Limited Liability Companies is regulated under the Law No. 40 of 2007 (“Company Law”). The Company Law determines provision of the responsibility of company’s shareholder
According to Article 3 (1) of Company Law, the shareholder of Limited Liability Companies (“Company”) are not personally liable for legal relationships entered into on behalf of the Company and are not liable for the Company’s losses in excess of the shares they own. This provision confirm the character of the Company where the shareholder are only liable for the amount paid up on all of the shares they own and it does not cover their personal assets.
However, there is a possibility that the shareholder shall be responsible until their personal assets based on Article 3 (2) of Company Law, if:
a. the requirements for the Company to be a legal entity have not been or are not fulfilled;
b. the shareholder concerned directly or indirectly exploits the Company in bad faith in his/her personal interest;
c. the shareholder concerned is involved in illegal acts committed by the Company;
d. the shareholder concerned directly or indirectly illegally uses the Company’s assets with the result that the Company’s assets become insufficient to pay off the Company’s debts.
Moreover, in relation with the liquidation matter, according to the Article 150 (5) of Company Law, the shareholder must return the remaining assets resulting from the liquidation as proportion with the ratio of the amount received to the amount of the bill. The obligation of the shareholder to return the remaining asset shall be carried out by the shareholder when the remaining assets have been divided among shareholders and there are creditors who have not yet submitted their bills.
Jennyke Setiono
