Every Company in Indonesia requires having Deed of Establishment (“DOE”) and Approval from Minister Law & Human Rights. DOE’s is made by the founders of Company in front of Public Notary which made in Bahasa Indonesia. In the process of DOE, Founder can be represented by other persons by giving a power of attorney.

The DOE, also known as Articles of Association contained the Company Profile and other information relating the establishment of Company, such as Identity Card the Founder and Shareholders. Company Articles of Association usually containing following details information:

  1. The Company’s name and domicile;
  2. The purpose and objectives and Company business field;
  3. The company’s period of incorporation;
  4. The amount of authorized capital, subscribed capital, and paid-up capital;
  5. The number of shares, classifications 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;
  6. The name, position and number of members of the Board of Directors and Board of Commissioners;
  7. The determination of the place and procedure for holding a General Meeting of Shareholders (“GMS”);
  8. The procedures for the appointment, replacement, and dismissal of members of the Board of Directors and Board of Commissioners;
  9. The procedure for the use of profits and allocation of dividends.

Further, in Articles of Association may not contain the following matters:

  1. Provisions concerning receipt of fixed interest on shares; or
  2. Provisions concerning the grant of personal benefits to the founders or other parties.

The Company domicile is also determined in Articles of Association. Company domicile shall have been domiciled in the City or Regency within the territory in the Republic of Indonesia. The question is how if the Company domicile change? Are the Articles of Association also change? If there are any changes about Company domicile and/or Shareholders composition, the Articles of Association shall have been changed. And the GMS has authorized to determine the changes of Article of Association.

In other countries, DEO is also called Memorandum of Association, Memorandum & Article of Association, Articles of Incorporation. For example in Singapore, Memorandum is the document that sets up the company and the articles of association set out how the company is run, governed and owned. The articles of association will include the responsibilities and powers of the directors and the means by which the members exert control over the board of directors. Now, Memorandum & Article of Association has been merged into a single document called a Model Constitution.

The Model Constitution states the following matters:

  1. The name of the company;
  2. The type of business;
  3. The liability of its members; and
  4. The capital amount of the company.

The constitution also outlines the main purpose of the company, the responsibilities and rights of the directors and how a company must operate.

To ensure a smooth investment and business operation from the legal perspective, but also still focus on maintaining your business in Indonesia and reach your revenue target, it is advised for you to find capable and trusted lawyers or legal consultants for advice and assistance in ensuring your legal compliance with prevailing laws and regulations.

SMART Consulting is an Indonesian Corporate Legal Services firm. SMART has assisted Clients in dealing with matters related to Investment Law, such as assist Client to establish Foreign Direct Company and Representative Office. We also assist Clients regarding the Compliance and Corporate Legal Services.

Contact Us Now to get your legal solution for your business goals, and still comply with the prevailing laws and regulations.
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