General Meeting of Shareholders’ Quorum: How many votes do you need to get a resolution approved?
General Overview
General Meeting of Shareholders (“GMS”) is listed among the three organs in an Indonesian limited liability company. It possesses distinct power and authority that are not granted to the other company’s organ: the Board of Directors (“BOD”) and Board of Commissioner (“BOC”). In exercising its authority, the GMS must pass resolutions that require a specific mandatory quorum.
The quorum may be at least, or more than: (i) a half; (ii) two thirds; (iii) or three quarters of all of the issued shares with valid voting rights. Defining the quorum for a shareholders meeting shall depend on the agenda of the meeting, please refer to the company’s articles of association (“AOA”).
In order to reach a quorum, GMS may be held for more than one meeting, with a maximum of three meetings. Should the first and second meeting does not meet the required quorum, the company may submit an application to the Chairman of District Court in the jurisdiction of the company’s domicile, to decide on the third meeting quorum.
In this ARMA Update, we outlined the respective quorum for each meeting agenda in the GMS.
Quorum in the First Meeting
We elaborate the quorum for each GMS agenda in the first meeting, as follows:
Aside from the quorum mentioned above, the company has the flexibility to set a larger quorum for any GMS under its AOA, but it must not establish a quorum that is smaller than the prescribed minimum.
Quorum in the Second GMS Meeting
In the event the first meeting does not reach a quorum, the summon of the second meets of GMS can be held. Below is the quorum for each GMS agenda in the second meeting, as follows:
If such a quorum stated on the above table is also not fulfilled, the company may submit an application to the Chairman of District Court in the jurisdiction of the company’s domicile, to decide on the third meeting quorum.
Circular Resolution In Lieu Of GMS
Shareholders may also adopt binding resolution by preparing the circular resolution in lieu of GMS, provided that all shareholders with affirmative vote give their approval in writing by signing the relevant proposal.
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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