Introduction
Replacing members of the Board of Director is a critical process in maintaining effective corporate governance in Indonesia. Whether due to resignation, dismissal, or internal restructuring, the procedure must follow specific legal guidelines to ensure compliance with Indonesian Company Law. CPT Corporate, as a reliable provider of corporate secretarial service, helps businesses navigate this complex process.
This article provides a comprehensive guide on how to legally replace members of the Board of Director in Indonesia, covering legal requirements, procedural steps, and documentation needed.
Understanding the Role of the Board of Director in Indonesia
The Board of Director is responsible for managing the company and representing it both in and outside court. According to Law No. 40 of 2007 on Limited Liability Companies (UUPT), members of the Board of Director are appointed and dismissed through the General Meeting of Shareholders (GMS). Any changes in the composition of the Board of Director must be reported to the Ministry of Law and Human Rights.
Legal Basis for Changing the Board of Director
Company Law Regulations
- Law No. 40 of 2007 (UUPT) governs the establishment and operation of Limited Liability Companies (PT).
- Article 94 to 111 of the UUPT specifically regulates the appointment and dismissal of members of the Board of Director.
GMS as the Decision-Making Body
- A change in the Board of Director must be approved by the General Meeting of Shareholders (RUPS).
- The result must be notarized and reported to the government.
The Step-by-Step Process of Replacing Directors
Step 1 – Convene a General Meeting of Shareholders (GMS)
- Notify shareholders and schedule the GMS in accordance with the Articles of Association.
- Conduct the GMS to approve the removal or appointment of members of the Board of Director.
- Record meeting resolutions.
Step 2 – Prepare the Notarial Deed
- Draft a notarial deed reflecting the resolution to replace the Board of Director.
- Ensure the deed is written in Bahasa Indonesia.
Step 3 – Submit Notification to the Ministry of Law and Human Rights
- Submit the change through the AHU (Administrasi Hukum Umum) online system.
- Provide supporting documents such as:
- Copy of the notarial deed.
- Identity documents of the new Board of Director.
- Acceptance letter signed by the incoming director.
Step 4 – Update Other Corporate Documents
- Update company data in OSS (Online Single Submission), especially if the company is a PT PMA (foreign investment company).
- Inform tax offices and financial institutions, if applicable.
Documents Required for Director Replacement
Essential Documents
- Copy of the company’s latest Articles of Association.
- Copy of the notarial deed of the GMS resolution.
- KTP or passport (foreign) of the new and outgoing Board of Director members.
- Tax Identification Number (NPWP) if required.
- Signed acceptance letter from the new Board of Director.
Why Legal Compliance Matters
Non-compliance in replacing members of the Board of Director can lead to:
- Legal disputes and challenges on company representation.
- Delays in licensing and banking activities.
- Fines or sanctions by the Ministry of Law and Human Rights.
CPT Corporate’s Corporate Secretarial Service
Navigating corporate legal procedures can be complex and time-consuming. CPT Corporate provides comprehensive corporate secretarial service that includes:
- Drafting GMS invitations and resolutions.
- Preparing and filing notarial deeds.
- Managing AHU and OSS submissions.
- Ensuring all members of the Board of Director are legally recorded and compliant.
Conclusion
Replacing members of the Board of Director in Indonesia is a formal process governed by specific legal requirements. With the right support and guidance, this process can be handled efficiently and accurately. Partnering with CPT Corporate’s corporate secretarial service ensures your company remains fully compliant while focusing on strategic operations.
Ensure Smooth Board Changes with CPT Corporate
Need assistance with your company’s governance structure? Contact CPT Corporate today for professional corporate secretarial service that covers every aspect of Board of
Frequently Asked Questions (FAQ)
Can a member of the Board of Director resign voluntarily?
Yes. The resignation must be submitted in writing and approved during a GMS.
Do we need to notify the tax office after a director change?
Yes. It is highly recommended to update director information with the tax office.
Can a foreign national be appointed as a member of the Board of Director?
Yes. However, certain roles may require a work permit and approval depending on the business sector.
What happens if a company does not report changes in the Board of Director?
Failure to report can result in invalidation of corporate actions, fines, or inability to obtain licenses.
How can CPT Corporate assist in replacing the Board of Director?
CPT Corporate provides end-to-end corporate secretarial service to handle all legal formalities, documentation, and government filings.
