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International Undergraduate Program
University of Gadjah Mada
Yogyakarta, 12 April 2016

By: Elisabeth Maria Kurniawati,S.H.,M.H.

Setiarto and Pangestu Law Firm
CV (Maria)
Formal Education:
• Under Graduate from Gadjah Mada University;
• Post Graduate from University of Pelita
Registered association:
• PERADI (Advocate);
• HKHPM (Capital Market);
• AKPI (Curator).
• Managing Partner at Setiarto & Pangestu Law
• Contact to:
“Limited Liability Company”

“Where We can find the

Regulation Regarding the
Limited Liability Company”?
• Law No. 40 of 2007 regarding Limited Liability
Companies (“Company Law”), effective on
August 16th, 2007;

• Law No. 1 of 1995, effective on March 7th, 1996

(one year after the enactment);

• Law No.4 of 1971, effective on March 29th, 1971

jo.Indonesian Commercial Code (Kitab Undang
Undang Hukum Dagang) (Stbl 1847:23) Article 36 -
Article 56

Compulsory: harus (shall/must/ have to), tidak

boleh … (cannot be deviate), paling sedikit (at

Not Compulsory: Dapat (may).

Company Law
Ex. Article 19
“Amendment of the article of association must
be determined by a General Meeting of
Ex Article 21:
“Certain amendments to the Article of
Association must have approval from the
• Ex: Article 57
“Article of Association may set forth provisions
concerning requirements for the transfer or rights to
shares, namely:
a. Obligation to first offer the rights to shareholders
of a certain class of shares or to other
b. The obligation to obtain prior approval from the
Company’s organs; and/or
c. The obligation to obtain prior approval from the
competent authorities in accordance with the
applicable laws and regulations.
AoA vs Company Law
• See the AoA first;

• See the Company Law Regulation.


Legal Basis of Acquisition
1. Law No. 40 of 2007 regarding Company Law (Article 125);
2. Government Regulation No. 27 of 1998 regarding Mergers,
Consolidations and Acquisition (24 February 1998) (Article 26-33);
3. Government Regulation No. 43 of 2005 regarding Merger,
Consolidation, Acquisition and Change of Form of State-owned
Enterprises (25 October 2005) (Article 33);
4. Bank Indonesia Board of Directors Decision No. 32/50/KEP/DIR
regarding Procedures and Requirements for Purchasing Commercial
Bank Shares (14 May 1999);
5. Bank Indonesia Regulation No. 5/25/PBI/2003 regarding the Fit and
Proper Test (11 November 2003);
6. Bapepam regulation IX.H.1 regarding Acquisition of Public Company
(Article 3);
7. Law No. 5 of 1999 regarding Prohibition of Monopolistic Practices and
Unfair Business Competition (Article 29);
8. Government Regulation No.57/2010 regarding Merger or Consolidation
and Acquisition of a Company’ Shares That Caused Monopolistic and
Unfair Competition
• The Purchase of one company by another in order to fulfill
particular strategic goals related to revenues, market share,
product/service offerings, or competition. An Acquisition may be
structured as a stock acquisition , where the acquiring company
offers investor in the target company a specific price for their
common stock or an asset acquisition, where the acquiring
company offers to buy a portion or majority of the target
company (Blacks law Dictionary 2nd Edition)
Definition of Acquisition

 Pursuant to Article 1 paragraph (11) Law No. 40 of 2007 means a

legal action taken by a legal entity or individual person to
acquire shares in a Company resulting in the passing of control
of the Company.

 Pursuant to GR No.27/1998, means a legal action undertaken by an

individual or a legal entity to acquire all, or a large part, of the
shares of a company which may result in a change of control of
the company.
Change of Control

• 50+1 %;
• Existing shareholders or new shares;
Change of Control as the Result of
Authorized Capital : 20.000 shares
PT. X Issued and Paid Up Capital : 10.000 shares

2000 shares (20%)

2000 shares (20%)
Acquisition by
PT. C the Company
6000 shares (60%)
Change of Control as the Result of
Authorized Capital : 20.000 shares
PT. X Issued and Paid Up Capital : 10.000 shares

2000 shares (20%)

Existing Shareholder
3000 shares (30%)

6000 shares (60%)
Change of Control from the Portfolio Shares
as the Result of Acquisition
Authorized Capital : 20.000 shares Authorized Capital : 20.000 shares
PT. X Issued & Paid Up Capital : 10.000 shares
PT. X Issued & Paid Up Capital : 15.000 shares

2000 shares (20%)
3000 shares (30%) 3000 shares (20%)

5000 shares (50%) 10.000 shares
Purpose of Acquisition

• The purpose of the takeover (acquisition) in terms of corporate and

business aspects is the “transfer of control” of the Company from the
acquired company to the acquirer company.
• The Company still as valid and exist as before.

Business perspective:
 To make a Holding Company (Structuring);
 For IPO (structuring);
 To buy a company that is not running well in recent business;
 To sell a very healthy company;
 To buy the good asset of the company., i.e land
Impact With Other Regulations

Foreign Company (PT PMA)

acquisition of shares in local companies by foreign companies

shall result in change of status of the acquired company into a
foreign company. Therefore, the acquired company shall be
subject to Law No. 25 of 2007 regarding the Capital
Investment and the regulation of Capital Investment
Coordinating Board (BKPM).

? How about the PT TBK and the new shareholders is foreign

company or foreigner

if the intention is to acquire control of the target

bank or more than 25% of its issued shares, the
acquirer must obtain BI’s approval and pass BI “fit
and proper” test.
BUMN (State-Owned Enterprises)

GR No. 43 of 2005 requires that a business

combination of state-owned enterprises be
stipulated in a government regulation and
approved by the Indonesian President.
PT Tbk

taking over control in public company whether by

acquiring 50% of the shares or either directly or
indirectly intending to control the management,
shall trigger a mandatory tender offer, as
stipulated in Bapepam Regulation IX.H.I.
acquisition of companies of shares which cause
its assets value and/or sales value to exceed a
certain amount, must be reported to the
Commission at the latest within a period of 30
(thirty) days after the merger or acquisition
takes places.;
The asset is up to: Rp.2,5 Trillion;and/or
The selling price is up to:Rp.5 T;
If for banking sector, if the asset value exceed
Rp.20 T

• If not submit the written notification will

be fine Rp.1 billion,- per day and max fine
is Rp.25 billion
Formality of an Acquisition in a Company

Acquisition through Acquisition directly

the Director through the
Acquisition Through Director

1. The acquiring party must present its intention of performing an

Acquisition to the Board of Directors of the Company to be acquired
(Article 125 paragraph 5)
2. Compile a draft Acquisition (Article 125 paragraph 6)
3. Obtain a GMS resolution regarding Acquisitions (Article 127 paragraph 1)
4. Shall announce the summary of draft Acquisition
5. Creditor may submit objections to the Company (Article 127
paragraph 4)
6. Draft of Acquisition shall be set forth in a Deed of Acquisition (Article
128 paragraph 1)
7. Copy of the Deed of Acquisition shall be attached to the delivery of
notification to the Minister (Article 131 paragraph 1)
Acquisition directly through Shareholder

Not Required Required

1. The acquiring party not 1. Conduct negotiation and direct

required to present its deal (Article 125 paragraph 7)
intention of performing an 2. Must announce an agreement
Acquisition (Article 125 of the acquisition plan (Article
paragraph 7) 127 paragraph 8)
2. Not required to compile a draft
Acquisition (Article 125
paragraph 7)
Rights of the Shareholders Whom
Disagree Over the Acquisition

Article 126 paragraph (2) granted a rights to the Shareholders who do

not agree with the General Meeting of Shareholders with regard to
the Acquisition.

The rights as referred to in this Article is the rights as set forth in

Article 62 Company Law, which is each shareholder is entitled to
request the Company that the shareholder’s shares be bought at a
fair price, if the shareholder concerned does not approve of actions
by the Company which harm that shareholder or the Company.
General Meeting of Shareholders’s Quorum
for Acquisition

General Meeting of Shareholders (“GMS”) may be held if more than

½ (one half) of the total number of shares with voting rights are
present or represented in the GMS, unless a larger quorum is
specified by Statute or by the articles of association.

GMS to approve Acquisitions may only be held if in the meeting at

least ¾ (three quarters) of the total number of shares with voting
rights are present or represented in the GMS and the resolution shall
be lawful if approved by at least ¾ (three quarters) of the number of
votes cast, unless the articles of association specify a quorum to be
present and/or provisions concerning the requirements for adoption
of GMS resolutions which are higher.
Legal Consequences of Acquisition

1. Transfer of control of the acquired company to the

acquirer company (Article 125 paragraph 3).;

2. Employee Working Relation

 If the Worker is not willing to continue: 1 PMTK (Article

163 (1);
 If the Company is not willing to continue: 2 PMTK (Article
163 (2).
3. Change in the Shareholder and Director and/or the
Board of Commissioner in the Articles of Association;
4. Change partial or part of the AoA.
Timeline of Acquisition
No Actions Document Required Authorized Person Time
1. Announcement in the • The announcement of the Director of the 30 (thirty) days
Newspaper regarding the acquisition in the Newspaper; Acquired Company before the
acquisition • The announcement to the GMS is signed
2. The signing of General • The draft of GMS of the Shareholder of the 30 (thirty) days
Meeting of Shareholders company; Acquired Company after the
(“GMS”) with agenda as • Copy of the Identity Card of announcement
follows: the Shareholders; in the
a. Approval to change the • Copy of the Articles of Newspaper
composition of Association of the Company;
shareholders; • Ratification from the Minister
b. Approval to change the of Law and Human Rights
composition of Board of (“MoLHR”);
Director (“BOD”) and • Copy of the Identity Card of
Board of Commissioner the new Shareholders;
(“BOC”) (If any). • Copy of the Identity Card of
the new BOD and BOC (if
No Actions Document Required Authorized Person Time
3. Signing of consent letter Copy of the Identity Card of the Spouse of the -
from the spouse of the Spouse’s Shareholders Shareholder
Shareholders of the
Acquired Company (if the
Shareholder is an Individual)

4. Signing of Sale Purchase • Approval Letter from spouse Notary for the Deed 2 (two)
Agreement (“SPA”) consent of existing working days
• GMS of the Company
• Copy of identity card or
Passport of the new BOD &
• Copy of identity card of
existing shareholders and
spouse consent;
• Copy of AoA of the new
No Actions Document Required Authorized Person Time
5. Submit application to • Articles of Association of the Notary
Minister of Law and Human Company;
Rights (“MoLHR”) for • Tax Registration Number
approvals and (NPWP) of the Company;
acknowledgement of GMS • Certificate of Domicile of the
agenda Company (SKDP)
Effective Date of the Acquistion
(Article 32 GR No. 27 of 1998)
1. If the acquisition of the company is conducted by amending the
Articles of Association as referred to in Company Law, the
acquisition shall prevail from the approval date of the Articles of
Association by the Minister.
2. If the acquisition of the company is conducted accompanied by
changes in the Articles of Association which does not require
approval of the Minister, then the acquisition shall prevail since
the receipt for the notification of the amendment to the Articles
of Association is issued by the Minister.
3. If the acquisition of the company did not result in a change of
Articles of Association, then the acquisition shall prevail since
signing the Deed of Acquisition.
Setiarto & Pangestu
2nd Floor, Zona A, Unit 2
Jl. H.R Rasuna Said Kav.B-6
Jakarta Selatan 12910