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Director or Commissioner Change in Indonesia – Procedure

change director commissioner indonesia

The board of directors (BOD) is the company organ which manages the day-to-day business of a limited liability company (local PT or foreign PMA) in Indonesia. The board of commissioners (BOC) supervises the directors and can step in and report to the shareholders of the company if necessary. From time to time companies will change their director or commissioner. Since directors and commissioners are not regular employees, a specific procedure applies for such amendment. The process of amendment always involves the appointment of a new commissioner or director in the company. In addition, it may involve the dismissal of the current member of the BOD or BOC.

In short, the procedure for the amendment of members of the BOC or BOD is as follows:

  1. Shareholder decision. The shareholders of the company convene an extraordinary general meeting of shareholders (GMS) or vote by way of shareholder circular. The shareholders must approve on the change in the composition of the members of the BOD or BOC.
  2. Notary deed. The public notary will notarize the GMS decision.
  3. Amendment of company data. The company data includes the current composition of BOD and BOC of the company. Consequently, when a director or commissioner is changed, this data must be updated.
  4. Amendment of company licenses and registrations. If there are company licenses which mention the resigning director, the company must update these licenses.

Shareholders Decision on Change of Director or Comissioner

Shareholders can decide on the amendment of directors or commissioners in the following ways:

  • The first option – extraordinary general meeting of shareholders: the shareholders schedule a meeting to decide on the amendment of the director / commissioner. The GMS will be deemed validly convened if at least 50% of the shareholders with voting rights attend the meeting. In addition, resolutions in the GMS will only be valid if more than 50% of the shareholders with voting rights votes in favor of the resolutions.
  • The second option – shareholder circular: if shareholder are unable to meet, they can prepare a shareholder circular. The circular is only valid and binding if all the shareholders with voting rights approve the decisions (unanimous vote). The circular is often the perfect solution for foreign shareholders, who are unable to attend a GMS in Indonesia. In certain cases the circular will however need legalization from the Indonesian embassy in the country of domicile of the foreign shareholder.

Notarial Deed of change director or commissioner

The appointed representative of the company will forward the results of the GSM or the shareholders circular to the Notary. The notary notary will confirm all data provided is correct and complete. Among others, this check includes a confirmation if the signatories have the authority to sign the shareholder circular or GMS resolution. The notary will also determine if there are any additional requirements, such as legalization of the circular in case of foreign shareholders.

Once all data is complete and correct, the notary will prepare a notary deed of the shareholders decision. This deed forms the basis for the amendment of the company data in the Register of Companies.

Change of Company Data

The ministry of law and human rights maintains the Register of Companies which holds the company data of all limited liability companies in Indonesia. The company data includes information about the domicile, business activities and amendments of articles of association of the company. In addition it contains information amount the current composition of shareholders, directors and commissioners.

Companies are unable to amend company data by themselves. Only notaries have the authority to request the amendment of company data to the ministry of law and human rights. Notaries will file such request after the notary deed of amendment of directors or commissioners is issued.

Change of Company Licenses and registrations

The company may need to amend certain company licenses in case of a director change. This often is the case when the dismissed director is mentioned in one of the business licenses or registrations of the company. In such case the company must register the replacement director in the licenses to remain compliant.