Protections for shareholders and/or minority shareholders under the Indonesian Company Law are as follows:
- A shareholder can file a claim at the district court against the company if they suffer unfair and unreasonable losses as a consequence of resolutions of the general meeting of shareholders (GMS), board of directors (BOD), or board of commissioners (BOC).
- A shareholder can request the company to purchase its shares at a reasonable price if that shareholder disapproves of the company’s actions that cause losses to shareholders or the company. Such actions can take the form of:
- amendments to the articles of association;
- a transfer or pledge of the company’s assets valued at more than 50% of the company’s net assets; or
- a merger, consolidation or acquisition of the company.
- Shareholders representing at least one-tenth of the total shares with voting rights can file a claim with the district court on behalf of the company against any member of the BOD and BOC who, because of his/her mistakes or negligence, has caused losses to the company.
- One or more shareholders representing at least one-tenth of the total shares with voting rights can submit a proposal for the dissolution of the company to the GMS.
There are no restrictions on granting additional protections to minority shareholders, but it is uncommon to grant such additional protections.
For more information, please contact:
Ira A. Eddymurthy, Partner
Revaldi N. Wirabuana, Associate
This first appeared in Establishing a Business in Indonesia, published by Thomson Reuters Practical Law. You can find the full chapter here.
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