LAW OF THE REPUBLIC OF INDONESIA
NUMBER 40 OF 2007
CONCERNING
LIMITED LIABILITY COMPANIES
BY THE GRACE OF ALMIGHTY GOD
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
Consideration :
a. whereas the national economy, which is operated on a basis of economic democracy with principles of community, efficiency, justice, sustainability, environmental awareness, independence and safeguards for balanced progress and national economic unity, needs to supported by firm economic institutions in the context of creating prosperity for society;
b. whereas in the context of increasing developmentof the national economy and at the same time giving a firm basis for the business world in facing the developments in the world economy and progress in science and technology in the coming era of globalisation, the support is needed of an act regulating limited liability companies which can secure the operation of a conducive climate for the business world;
c. whereas limited liability companies as a pillar of national economic development need to be given a legal basis to spur on national development composed mutual enterprises on the basis of the principle of a family spirit;
d. whereas the Limited Liability Companies Act No. 1 of 1995 is viewed as no longer in accordance with legal developments and the needs of society and so needs to be replaced with a new act;
e. whereas given the above in paragraphs a, b, c, and
d, it is necessary to form a Limited Liability
Companies Act.
Bearing in mind: Article 5 paragraph (1), Article 20, and Article 33 of the 1945 Constitution of the Republic of Indonesia. With the Common Assent of
Bearing in mind: Article 5 paragraph (1), Article 20, and Article 33 of the 1945 Constitution of the Republic of Indonesia. With the Common Assent of
THE HOUSE OF PEOPLE’S REPRESENTATIVES OF THE REPUBLIC OF
INDONESIA
INDONESIA
and
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
HAS RESOLVED
to promulgate:
HAS RESOLVED
to promulgate:
A LIMITED LIABILITY COMPANIES ACT
CHAPTER I
GENERAL PROVISIONS
Article 1
In this Act, the following terms have the following meanings:
1. “Limited Liability Company” (hereinafter called a “Company”) means a legal entity which constitutes an alliance of capital established pursuant to a contract in order to carry on business activities with an authorised capital all of which is divided into shares and which fulfils the requirements stipulated in this Act and its implementing regulations.
In this Act, the following terms have the following meanings:
1. “Limited Liability Company” (hereinafter called a “Company”) means a legal entity which constitutes an alliance of capital established pursuant to a contract in order to carry on business activities with an authorised capital all of which is divided into shares and which fulfils the requirements stipulated in this Act and its implementing regulations.
2. “Company Organs” means the General Meeting of Shareholders, the Board of Directors, and Board of Commissioners.
3. “Environmental and Social Responsibility” means a Company’s commitment to taking part in sustainable economic development in order to improve the quality of life and environment, which will be beneficial for the Company itself, the local community and society in general.
4. “General Meeting of Shareholders” (hereinafter called the “GMS”) means the Company Organ which has authority not given to the Board of Directors or Board of Commissioners within limits specified in this Act and/or the articles of association.
5. “Board of Directors” means the Company Organ with full authority and responsibility for the management of the Company in the interests of the Company in accordance with the Company’s purposes and objectives and to represent the Company in and out of court in accordance with the provisions of the articles of association.
6. “Board of Commissioners” means the Company Organ with the task of general and/or specific supervision in accordance with the articles of association and giving advice to the Board of Directors.
7. “Open Company” means a Public Company or a Company which makes an public offering of shares in accordance with the provisions of legislative regulations in the field of capital markets.
8. “Public Company” means a Company which fulfils the criteria of number of shareholders and amount of paid up capital in accordance with the provisions of legislative regulations in the field of capital markets.
