New MOLHR Procedures for Raticication of Legal Entities, Amendment of AoA and Company Data
On March 26, 2014, the Minister of Law and Human Rights (“MOLHR”) issued regulation No. 4 of 2014 (“Regulation”) on Procedures for Applications for Ratification of Legal Entities and Approval and Notification of Amendments of Limited Liability Companies’ Articles of Association, which revokes the previous regulation issued in 2011.
Company filings must now be submitted electronically to the MOLHR through the Legal Entity Administration System (Sistem Administrasi Badan Hukum – “SABH”, formerly called Sisminbakum), although hardcopy submission is permitted in situations where an internet connection is not available.
Following are the highlights of the updated procedures.
♦ Approval of Company Name
To reserve the name of a new company, a nonrefundable administration fee must be paid to an appointed bank before submitting the Company Name Submission Form (previously, the fee was paid only after the company name was approved). Once the fee is paid, the company has 60 days to submit its application through the SABH for approval by the MOLHR. Once the name is approved, the name will be reserved for the company for 60 days thereafter.
♦ Ratification of Legal Entities
To validate the company as a legal entity, within 60 days after execution of the Deed of Establishment, a Company Incorporation Form must be submitted through the SABH, along with an electronic statement letter from the applicant attesting to the sufficiency of all supporting documents.
Once the MOLHR issues a decree ratifying the legal entity, the decree can be printed directly from the system (using 80 gram F4/folio white paper) by a Notary Public, who must sign and chop the decree with their Notary stamp, including the phrase, “Keputusan Menteri ini dicetak dari SABH” (This Decree is printed from SABH).
Amendments of a company’s Articles of Association (AOA) and certain company data must be submitted for approval or notification through the SABH using an Amendment Form. The Regulation unifies the application forms for both approval and notification triggered by amendment of AOA provisions or company data.
As under the previous regulation, the following AOA amendments must obtain approval from the MOLHR:
- Company name or domicile
- Company purpose, objectives and business activities
- Lifespan of the company (for companies established for a limited period of time)
- Authorized capital
- Reduction of issued and paid-up capital
- Change of status – going public or delisting
If an amendment is approved by the company’s shareholders in the form of a Unanimous Written Resolution of the Shareholders, the resolution must be drawn up in a notarial deed within 30 days, as only a notarial deed can be submitted to the MOLHR to validate an amendment of the AOA.
Other types of amendments and changes of company information only need to be notified to the MOLHR:
- Names and composition of shareholders
- Names and composition of Board of Directors
- Company address
- Dissolution of company or expiration of company lifespan
- Termination of legal entity status due to liquidation/bankruptcy
- Merger, consolidation, acquisition and separation which are not followed by amendment(s) to the company’s AOA
Of note, the Regulation adds deeds of consolidation and acquisition to the list of supporting documents that must be attached when submitting an amendment of the company’s AOA or company data, whereas the previous regulation only required deeds in case of merger.
ARFIDEA KADRI SAHETAPY-ENGEL TISNADISASTRA
The foregoing material is the property of AKSET Law and may not be used by any other party without prior written consent. The information herein is of general nature and should not be treated as legal advice, nor should it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.
- April 11, 2014