Business & Cooperate Law - Contract of Company

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End of Term Assignment



Name: Monica
Student ID: 00000011105
Class: A3
Subject: Business & Cooperate Law
Submission Date: Friday, August 14th 2015



Universitas Pelita Harapan (UPH)
Medan
2015
Table of Content
Introduction1
Type of Business Entity2
1. Sole Proprietorship2
2. Partnership2
3. Limited Liability Company3
3.1 Definition3
3.2 Different type of LLC3
a. Micro Company3
b. Small Company3
c. Medium Company3
d. Large Company3
3.3 Three organ of LLC4
3.4 Type of Share in LLC6
3.5 Reason to use LLC7
3.6 Establishment10
3.7 Administrative11
3.8 Dissolution and Winding-up14
Conclusion16
Reference
Attachment


Introduction
There are eight shareholders (I am one of it) who keen to establish a business in doing imported home accessories and furniture from all around the world. There are many type of company in Indonesia and one of them is Limited Liability Company. According to GOV.UK (2015), Limited Liability Company is a company, which separate the company's financial with personal finances. Profit will be taken by the company after minus the tax or is usually called as income after tax. In making a limited company isn't as hard as many people think. Just follow the procedure, which will be explained further in this report. By using the limited liability company, it is really help the shareholders who are really busy. The more detail, it will be explain in this report.

Type of business entity
In starting a business, you will need a company. The company that you built should registered in Ministry of Law and Human Right. There are three main types of business entities in Indonesia, such as:
Sole Proprietorships (Perusahaan Perorangan)
According to Entrepreneur (n.d.), sole proprietorship is the simplest form of business but not a legal entity. A sole proprietor is the one who responsible for all the liabilities. Sole proprietor acts under his/her own name. This is because sole proprietorship has no different identity in Law.

Partnership (Maatschaap, Firma and CV)
Maatschap (Perseroan Perdata)
Maatschap is the basic from of business entity. Maatschap can be form by using a simple agreement. The contract can be oral or written. There is no need to do a formal filing or governmental approval. It acts under the name of the owner. If there need any manager, then the parties can choose a third parties as a manager. If there isn't any manager, the both parties have the right to act as the maatschap nam e.

Vennootschap onder firma or Firma (Perseroan Firma)
Firma is a partnership from for commercial partnership for example like trading. The main different of maatschaap and firma is maatschaap is used for profession and firma is used for performing a trade or commerce. Every partner in Firma is responsible for each and every liability toward third parties.

Commanditaire Vennootschap or CV (Perseroan Komanditer)
It is another form of specialized partnership. In CV, there are two type of shareholder. The first one is ordinary partner, who responsible for the entire debt of the partnership. If the CV cannot pay anymore, then the personal assets of ordinary partner will be used to pay the debts to creditor. The second is silent parent, who only contribute capital to the partnership. In CV, silent partner is essential feature of a CV. It is because silent partner is the one who give the amount of capital. The benefit of silent parent is they have an unlimited of liability. This means that when the CV is full of debt, silent partner doesn't need to pay the debts using their own assets.
Limited Liability Company or LLC (Perseroan Terbatas)
Definition
Limited Liability Company (LLC) is a legal entity in Indonesia. This means that the company can open a bank account, have a tax number and do business under the company name. Limited Liability Company (LLC) must have minimal two persons as founder by a notarial deed what made in Indonesia language. In Indonesia, there is law for on Limited Liability Companies, which is UPPT. In 2007, UPPT was changed and replaced by Law Number 40 of 2007 (Company Law).

Different Type of Limited Liability Company
There are four types of the Limited Liability Company under the law number 20 of 2008, which are:
Micro Company
There are two requirements to say the Limited Liability Company (LLC) is Micro Company, which are:
Net capital isn't exceed 50 million rupiah excluding the land and building, or;
The maximum of annual turnover is 300 million rupiahs
Small Company
There are two requirements to say the Limited Liability Company (LLC) is Small Company, which are:
Net capital is from 50 million rupiah to 500 million rupiahs excluding the land and building, or;
The annual turnover is from 300 million rupiahs to 2.5 billion rupiahs
Medium Company
There are two requirements to say the Limited Liability Company (LLC) is Medium Company, which are:
Net capital is from 500 million rupiah to 10 billion rupiahs excluding the land and building, or;
The annual turnover is from 2.5 billion rupiahs to 50 billion rupiahs
Large Company
There are two requirements to say the Limited Liability Company (LLC) is Large Company, which are:
Net capital is exceed 10 billion rupiah excluding the land and building, or;
The annual turnover is more than 50 billion rupiahs
From this requirement, it can be seen that the most suitable type of the Limited Liability Company is Micro Company. It is because we, as the shareholders, don't expect to invest more than US$ 300,000 (± 3,9 million rupiahs) and the profit won't be more than US$ 100,000 (± 1,3 million rupiahs) in total five years. This means that for every year there will be US$ 20,000 (± 260 million rupiah) in average profit.

Three organ of Limited Liability Company
General Meeting of Shareholders (GMS)
The one who attend the general meeting of shareholders are the one who contribute capital to company. The main obligation of shareholders is to contribute capital to company. The shareholders have the right to appoint or terminate members of Board of Director (BOD) and Board of Commissioner (BOC). The main purpose of general meeting of shareholders is to controlling Board of Director and Commissioner in performing their duties and responsibilities of the company. The right of shareholders:
Pre-emptive
Shareholders become the first priority when the company issues additional shares, which increase the company's capital. (Article 43 Company Law)
Right to file a claim to the court
Shareholders can claim to the court if the result of the GMS, BOD, and/or BOC is unfair and unreasonable. (Article 61 Company Law)
Right of shares to be purchased with reasonable price
Shareholders have the right to ask the company to buy their share with a reasonable price because the shareholders disagree with company's action. For example likes amendment of Article of Association (AOA), and other that is write in article 62 of company law.
Right to request to District Court to convene GMS
Shareholders can request to District Court to convene a GMS.
Right to attend GMS
Every shareholder has the right to attend GMS and vote according to the amount of share.
Right to pledge shares
Every shareholder has the right to put theirs shares as a security for loans.

Board of Directors (BOD)
The Board of Directors is the organ responsible for the management of a Company or for running the day-to-day operations and business of the Company. The number of direct can mare than one depend on the company's needs. There are criteria of Director:
Having the ability to perform legal action
In five years prior, he or she cannot declare bankrupt, a member of BOD or BOC that caused bankrupt to the company and committing a crime, which caused loss to the state.
The responsibility of Director:
Delivered an annual report
Preparing the business plan
Preparing and maintaining a Register of Shareholders of the company and Special Register which contain the share ownership information
Archiving the resolutions of the Shareholders and Board of Directors of the Company and all other corporate documents
Obtaining approval from GMS related to transfer or encumbrance the company assets more than 50%
Holding a General Meeting of Shareholders
Notifying the Minister of Law and Human Right regarding to any change in BOD and BOC
Recording any transfer of shares
Notifying the creditor in the newspaper regarding the decreasing in capital
Transaction in special case likes merger, acquisition or other, Director has the obligation to make the transection plan, announce the proposed transection on newspaper and act as the liquidator in the dissolution
Restriction on Directors:
Don't have any voting right
May not perform any legal action using the company name
Cannot file for bankruptcy of the company without the approval from shareholders
For amending the Article of Association (AOA), conducting a merger or acquisition, and other action which written in the AOA, BOD need the approval from shareholders to conduct the action.
Board of Commissioners (BOC)
Board of Commissioners (BOC) job is to supervising the directors who performing its duties and responsibilities in the Company. BOC should act in good fate and giving advises to the BOD. The criteria of Commissioner are the same with the criteria of Director. Responsibilities of Commissioner:
Supervising the company and give advises to the BOD
Examine the annual report and business plan and approve the budget plan
Secretarial responsibilities like preparing the minutes of GMS and reporting their supervising of the company
Supervising the BOD in transaction including the transection plan for merger, equitation, and other
Restriction on Commissioner:
Don't have any voting right
Member of BOC cannot act alone

Type of Share in a Limited Liability Company (LLC)
There are two types of share:
Common share
All shareholders who have this type of share are equal with no privilege. According to the article 52 of Company Law, there are the following right of the common share:
Can attend and vote in GMS
Receiving dividend after liquidation
Other right that are explained in the Company Law

Preferred Shares
Preferred shares have highest priority than common share. In common share, there are with voting right and without voting right. Share with privilege right have the authority to vote for the BOD and BOC. Preferred share have a grater claim to the assets of the company. The one who hold the preferred share will get the dividend first then the common share.

Other type of share
Registered share
A paper of share, which has the name of the owner. It is hard to sales to other person because it should inform to the company.
Bearer shares
Bearer shares don't have the name of the owner. Because of that, it is easy to sell.
Non-voting shares
Non-voting shares is the share that doesn't have the right to vote.
Redeemable Share
A share, which have the right and obligation. The right is the company should but the share when we sell to them. The obligation is when we sell the share we must sell to the company.
Convertible Shares
Convertible shares are preferred share. But it can be changed into common shares.
Cumulative Share
Cumulative shares are preferred shares. In cumulative shares, it will cumulative if the dividend can't be paid.
Non-cumulative shares
Non-cumulative shares are preferred share. In non-cumulative shares, it won't be cumulative if the dividend can't be paid.
Participating Shares
After some of the obligation finished, then it will get bonus.
The Reason To Use Limited Liability Company (LLC)
According to the BizFilings (n.d.), there are the advantages of using Limited Liability Company (LLC) to shareholders, which are:
Protected Assets
By using Limited Liability Company (LLC), it protects the owners' assets as the members of the company. Even the company has collapsed, the assets of the owners will still safe.

Easy To Increase Capital
Only in Limited Liability Company (LLC) you can increase the capital easily. The way to increase the capital is to issue new share.
Heightened credibility
By established LLC, it will establish credibility with creditor, potential consumer, and employees.
Freedom
Shareholders don't need to take part in the company because in the Limited Liability Company (LLC), the one who is responsible for the company performance is Director. Supervisor only supervise the Director whether the director do their job well. Shareholders just only need to participate in GMS, which usually hold once a year.

Table comparison of Limited Liability Company (LLC), Partnership (Firma &CV), and sole proprietor:



Source: National Association of Tax Professionals
(NB: The more information of the table can be seen on the attachment)
From the table above, we can see that Limited Liability Company (LLC) is a legal business entity. It is suitable for a business especially for importing business. In doing import from other countries, we need a legal latter to do it. By using Limited Liability Company (LLC), shareholders can do their own things and not need to confuse about the company performance because there are directors and commissioners to handle it. It also advantages the owner when it comes to the Liability. If after selling all the company assets and it still can't cover all the debts, then the shareholders assets will remain safe because to is the advantages of using Limited Liability Company (LLC) in Business. By using Limited Liability Company (LLC), creditor or our potential costumers will more trust in the company or getting their credibility.

Establishment of Limited Liability Company (LLC)
In established a Limited Liability Company, it need two or more persons as the shareholders. It needs a notarial deed in Indonesia language. There are four steps to establish a Limited Liability Company (LLC), which are:
Execute the deed of establishment (including the Articles of Association) before a notary in the form of a notarial deed.
Obtain a formal approval of the deed from the Ministry of Law and Regulation.
Upon approval, the deed has to be registered in the Company Registry that is maintained by the Ministry of Industry and Trade.
Publish the deed of establishment in the State Gazette
According to the article 8 of company law, inside the deed of establishment, there should mention about Article of Association (AOA) and other information such as:
The identity of the company's founder
The identity of the Board of Director (BOD) and Board of Commissioner (BOC)
The information of total share in shareholders
When the company hasn't got the status of legal entity, the one who can take the legal action is BOD, BOC and founders. Therefore, it is important for the company to get the legal status. The way for the company to get the legal status is from the date of decree from the Minister of Law and Human Right. In order to get the decree the company should submit an application to the Minister of Law and Human Right via legal entity administration and no later than 60 days from the signature if deed of establishment. The application form must contains:
The name and domicile of the Company
The term of establishment of the Company
The purpose and objective with the business activity of the Company
The amount of authorized capital, issued capital and paid-up capital
The address of the company
If the application is accepted, the Minister of Law and Human Right will delivery an electronic acceptance reply and the applicant have 30 days to submit the deed of establishment and other necessary documents. If the company don't sent the deed of establishment and necessary document in 60 days, the deed of establishment will be void and the company don't get the legal status. However, if the application is rejected, the Minister of Law and Human Right will sent a rejection letter.

Administration of The Company
Article of Association
Provision in The Article of Association (AOA)
Article of Association (AOA) is a legal paper that contains the internal regulation and the company's management. According to the article 15 in company law, Article of Association (AOA) must contains:
The name and domicile of the Company
The purpose and objective with the business activity of the Company
The period of incorporation of the Company
The amount of authorized capital, issued capital and paid-up capital
The information of total share in shareholders
The hierarchy of the position and number of BOD & BOC
The procedure and place for holding a GMS
The procedure of choosing and replacing BOD & BOC
The procedure for profit utilization and dividend distribution
Inside the AOA may also contain other provision such as concern about the fixed interest of preferred share and to grant the shareholders benefit.

Amendment To The Article of Association (AOA)
The first thing to have in order to amendment the AOA is approved by GMS. The next step is to get the approval of Minister of Law and Human Right, which amendment of AOA shall contain:
The name and/or domicile of the Company
The purpose and objective with the business activity of the Company
The period of incorporation of the Company
The amount of authorized capital, issued capital and paid-up capital
Reduction on issued capital and/or paid-up capital
Changing the status of the Company from private company to Issuer or otherwise
Based on the article 21 paragraph 4 of company law said that all amendment of the AOA should stated in a notarial deed a notarial deed and in Indonesia Language.

Share Capital
According to the article 32 stated that the minimum capital is Rp. 50,000,000. And in article 34 said the at least 25% of authorized capital must be issued and paid in full. As the article of 49 said that all share must be in Indonesia Rupiah then all capital for the furniture company should convert in Indonesia Rupiah.
Payment for Shares
Payment of the share can use money and/ or other forms (Article 34). For example, pay the share capital by using effort or land, building or cars and money other. The valuation based on the reasonable price, which determined by the market price or an independent expert. Payment of capital with immoveable assets should be announced in the newspaper within the period of 14 days after signing the deed of establishment or after GMS resolve the payment.

Share Register
BOD should make the registration of the share, which in the list should consists:
Name and address of shareholders
The detail information about the percentage of the shares of shareholders
Amount paid-up for each share
The detail information for pledge over the share or fiduciary over shares and the date of acquisition
The description on the payment shares in other form
Every change of share ownership shall be recorded. BOD should also make a special register of BOD, BOC and their families, which has a share in the company. All the register is available in the company domicile.

General Meeting Of Shareholders (GMS)
The venue for GMS must within in Indonesia territory and shall be convened no later than six months after the end of accounting year. The venue can be in the company domicile or other places which the shareholders agree. If one of the shareholders cannot come, the he or she can use the teleconference, video conference or other technology that enable all the participant in GMS to see, hear and participate directly in the meeting (Article 77 of Company Law). The invitation of GMS can use email or advertisement on newspaper within the latest period of 14 days to the date of GMS. Only issued common share have the voting right, which their vote is according to the number of shares that they possess. BOD and BOC, which have the common shares, cannot use their voting right in GMS. That voting is only allowed in establishing quorum of GMS.
Quorum of General Meeting of Shareholders (GMS)
General Meeting of Shareholders (GMS) can be held if half of total shares with voting right are present or presented in GMS (Article 86 of Company Law). If the quorum for the first GMS isn't achieved half of number of shares, then the meeting must be open and close with minutes (meeting report) that explain why the first GMS cannot be held. To held second GMS, the invitation should be sent again which must stated why the first GMS couldn't be held. In the second GMS, it only need one third of the number of shares to present in the GMS. However, if the second GMS isn't achieved one theirs of present shares, then the company can apply for Chief Judge of District Court whose jurisdiction covers the company's domicile to the determine the quorum for the third GMS. The invitation for the second and third must be issued no later than seven days before it are held. Also for the second and third GMS, it cannot be held sooner for 10 days or no latter of 21 days after the previous GMS. To amendment the AOA and make a lawful decision, there is needed of 2/3 of total number shares to present in the GMS and approve it. For special case like mergers, consolidation, acquisitions, damages or declared bankrupt and winding up the company, it need ¾ of total numbers of share to present in GMS and approved it.
Shareholders' Request to Convene a GMS
Shareholder can convene a GMS if it is requested by 1/10 of the total number of shareholders. And then submitted to BOD accompany with the reason. If the BOD doesn't issued the invitation, then just requested back. It will issue by BOD with no more than 15 days of the receipt of request for convene a GMS. However, if the BOD and BOC don't issue the invitation of GMS, then the shareholders may submit an applicant to Chief Judge of District Court whose jurisdiction covers the company's domicile. The chief Judge may issue a court order and grant permission to the applicant shareholders to issue invitation to GMS.
Profit Utilization
The company has the obligation to put a certain amount of net profit for reserve and every year dividend. This net profit should have deducted the taxes and is a positive earning. This positive earning has covered the accumulated loss in the previous financial year and minimal of 20% reserve from the total of subscribed and paid-up capital. If the reserves haven't reached that amount then the reserves need to cover the losses only. For dividend, it can be distributed per year or shorter than that as long as it is stated in the Article of association (AOA). However, for the dividend, which is distributed in shorter time, the company should ensure that the Company's net assets is not less than the issued and paid-up capital plus the reserve fund.

Dissolution and Winding-Up of Companies
Dissolution is the result of winding-up. Winding-up is the company is still in the process of dissolution. The dissolution can occurs:
Based on the resolution of GMS
Due to the termination of the company's duration as stipulated in AOA
Based on the court order
Due to revoke bankruptcy statement because the company assets cannot sufficient to pay the bankruptcy cost.
Due to the condition of insolvency that has been declared by the Company as regulated in the Law regarding bankruptcy and the suspension of Debt Payment
Due to the revocation of the company's business permit, the company should conduct liquidation accordance with prevailing regulations
After the dissolution, the company cannot perform and legal actions beside the course of liquidation. If the company disobeys it, a member of BOD, BOC and the company shall be jointly liable. If GMS don't choose a liquidator then BOD is the one who as a liquidator. The legal entity of the company can lose before the completion of the liquidation and the GMS or court must accept the report of the liquidator. During the dissolution, every letter should attach "in liquidation" on the title. A court may also wind up a company based on the following reasons:
A petition of public prosecutor that company committed a crime
A petition from a party that has legal defect to the deed of establishment
A petition from shareholders, BOD and BOC that the company can't continue any further
Within the 30 days from the date the company winding up, all the creditor of the company should be notified by announced in newspaper and the State Gazette of the Republic of Indonesia. The notification should contain:
The dissolution of the company and its legal basis
The liquidator's name and address
The procedure for the submission of claims
The period for the submission of claims
The liquidator is responsible to the GMS or district court has obligation, which are:
Registered and collected company assets and liabilities
Announced in the newspaper and stated gazette
Paying to creditors
Paying the remaining assets to the shareholders
Other measure for the purpose of implanting the assets settlement
However, if the company assets cannot pay all the liabilities then the liquidator should submit a request regarding the company's bankruptcy and all creditors should agree that the settlement to be performed outside the court. If creditors don't agree, then the creditor can submit obligation to the liquidator within 60 days as the announcement date. If the liquidator rejected the objection then the creditor can submit a claim to the District court within 60 days of the rejection.

After the liquidation process has finished, the liquidator should notify the Minister the final result. After that, the Minister can register the end of the Company's status and omit the company's name from the company registry.

Conclusion
After, we see the advantages of using Limited Liability Company (LLC). I am one of the shareholders suggest to use the LLC. There are many advantages that will benefit us, for example, like the limited liability. I, as one of the shareholders, feel that my personal assets are safer by using LLC. Not only that, to other shareholders who don't want to a complex thing of forming and maintaining the company can feel relax now. Because it is easy to establish the LLC and the procedure isn't really complex. And also for maintaining the company, it just only need to hire director and commissioner to handle it for us. So, it isn't complex and has big advantages for us, as the shareholders.

References
BizFilings Benefit of Creating a LLC, [Online], Available: http://www.bizfilings.com/learn/creating-llc.aspx [8 Aug 2015].
Entepreneur, [Online], Available: http://www.entrepreneur.com/encyclopedia/sole-proprietorship [3 Aug 2015].
GOV.UK (2015), 1 Apr, [Online], Available: https://www.gov.uk/business-legal-structures/limited-company [8 Aug 2015].

ARTICLE OF ASSOCIATION OF
XYZ LIMITED LIABILITY COMPANY
NUMBER: 53521
On this day, Monday, 10 August 2015, there appeared before me, John Langsung, Notary in Medan in the presence of witnesses who are known to me, the Notary, and whose names will be stated in the testimonial to this deed,
Full Name: Alfa
Date and Place of Birth: Medan, 31 January 1989
Nationality: Indonesia
Occupation: Unemployee
Residing in: Jalan Kirana No 2b Medan
Citizen 's Identity Card Number: 1271199798680005
Full Name: Bravo
Date and Place of Birth: Medan, 1 Sptember 1988
Nationality: Indonesia
Occupation: Business man
Residing in: Jalan Bongsai No 233 Medan
Citizen 's Identity Card Number: 1271197698680003
Full Name: Charlie
Date and Place of Birth: Medan, 3 Mei 1985
Nationality: Indonesia
Occupation: Business man
Residing in: Jalan Sei Deli No 54 Medan
Citizen 's Identity Card Number: 1271294758260001
Full Name: Delta
Date and Place of Birth: Medan, 4 April 1984
Nationality: Indonesia
Occupation: Business man
Residing in: Jalan Angsa No 119 Medan
Citizen 's Identity Card Number: 1272199298730005

Full Name: Ehco
Date and Place of Birth: Jakarta, 12 June 1989
Nationality: Indonesia
Occupation: Emplyoee
Residing in: Jalan Bendera No 47 Medan
Citizen 's Identity Card Number: 127122657678680001
Full Name: Foxtrot
Date and Place of Birth: Medan, 1December 1990
Nationality: Indonesia
Occupation: Employee
Residing in: Jalan Duyung No 76 Medan
Citizen 's Identity Card Number: 1271195275990002
Full Name: Ginie
Date and Place of Birth: Medan, 14 August 1986
Nationality: Indonesia
Occupation: Unemployee
Residing in: Jalan Kakak Tua No 10 Medan
Citizen 's Identity Card Number: 1271192699680002
Full Name: Helen
Date and Place of Birth: Medan, 8 July 1987
Nationality: Indonesia
Occupation: Unemployee
Residing in: Jalan M.H Thambrin No 123C Medan
Citizen 's Identity Card Number: 12711997486500001
The appearances are known to me, the Notary.
The appearances acting on their own behalf and in their capacities mentioned above hereby declare that without prejudice to the permits from the authorized parties they agree and covenant to jointly establish a limited liability company with articles of association as contained in this deed of establishment (hereinafter abbreviated to the "Articles of Association") as follows:

NAME AND DOMICILE
ARTICLE 1
This limited liability company is called "PT. XYZ" (hereinafter abbreviated to the "Company"), domiciled in Medan, Indonesia.
The Company may open branch offices and representative office in and outside the territory of the Republic of Indonesia as determined by the Board of Directors.
PERIOD OF INCORPORATION OF COMPANY
ARTICLE 2
The company is established for unlimited period.
PURPOSE AND OBJECTIVES AND BUSINESS ACTIVITIES
ARTICLE 3
The Company's purpose and objectives is to get profit.
To achieve the above mentioned purpose and objectives the Company may carry out the following business activities:
Give the best marketing
Make the cost as low as possible
CAPITAL
ARTICLE 4
The Company's authorized capital is Rp. 48,000,000, divided into eight (8) shares, each share having a nominal value of Rp. 6,000,000.
Out of the authorized capital 100% or eight (8) shares with a total nominal value of Rp. 48,000,000 have been subscribed and paid up by the founders, who have subscribed for shares and the breakdown and nominal value of the shares is mentioned at the end of this deed.
Shares still in reserve will be issued by the Company in accordance with its need for capital, with the approval of the General Meeting of Shareholders.
The shareholders whose names are recorded in the Register of Shareholders shall have pre-emptive rights to subscribe for shares to be issued within the period of 14 (fourteen) days as from when the offer is made and each shareholder is entitled to subscribe in proportion to the number of shares he/she/it owns (proportionally), whether for shares which constitute his/her/its portion or for the remainder of shares unsubscribed by the other shareholders.
If after the lapse of the offer period of 14 (fourteen) days, it transpires that there are unsubscribed shares remaining, the Board of Directors is entitled to offer such remaining shares to third parties.
SHARES
ARTICLE 5
All shares issued by the Company shall be registered shares.
Evidence of ownership of shares may be in the form of share certificates.
In the event that the Company does not issue share certificates, ownership of shares may be evidenced by a declaration or record issued by the Company.
If share certificates are issued, a share certificate shall be given for each share.
Collective share certificates may be issued as evidence of ownership of 2 (two) or more shares owned by a shareholder.
At least the following must be noted on share certificates:
The shareholder's name and address;
The serial number of the share certificate;
The nominal value of the share;
The date of issuance of the share certificate.
At least the following must be noted on collective share certificates:
The shareholder's name and address;
The serial number of the collective share certificate;
The serial number of share certificates and the number of shares;
The nominal value of the shares;
The date of issuance of the collective share certificate.
Share certificates and collective share certificates must be signed by Director.
REPLACEMENT SHARE CERTIFICATES
ARTICLE 6
If a share certificate is damaged or can no longer be used, then at the request of those concerned, the Board of Directors shall issue a replacement share certificate after the damaged or unusable share certificate is surrendered back to the Board of Directors.
The share certificate contemplated in paragraph (1) must be destroyed and minutes made by Board of Directors for reporting to the next GMS.
If a share certificate is lost, then at the request of those concerned, the Board of Directors shall issue a replacement share certificate after the loss has been sufficiently evidenced in the opinion of the Board of Directors and with such guarantees as the Board of Directors considers necessary in any particular case.
After the replacement share certificate has been issued, the share certificate, which was declared to have been lost, shall no longer apply to the Company.
All costs in connection with the issuance of replacement share certificates shall be borne by the shareholder concerned.
The provisions contemplated in paragraphs (1), (2), (3), (4), and (5) shall apply mutatis mutandis to the issuance of the replacement collective share certificate.
TRANSFERS OF RIGHTS OVER SHARES
ARTICLE 7
Transfers of rights over shares must be based on a deed of transfer of rights signed by the transferor and transferee or their lawful proxies.
Shareholders who wish to transfer rights over shares must first offer them to the other shareholders stating the price and conditions of sale and inform the Board of Directors in writing of the offer.
Transfers of rights over shares must have the approval of the authorized agency if legislative regulations so require.
As from the date of invitations to a GMS until the day the GMS is held, transfers of rights over shares will not be allowed.
If due to inheritance, marriage, or some other cause the shares are no longer the property of an Indonesian citizen or Indonesian legal entity, then within 1 (one) year such person or legal entity must transfer the rights over shares to an Indonesian citizen or legal entity in accordance with the provisions of the Articles of Association.
GENERAL MEETING OF SHAREHOLDERS
ARTICLE 8
General Meetings of Shareholders hereinafter called GMS are:
Annual GMS;
Other GMS, which in these Articles of Association are also, called extraordinary GMS.
The term GMS has two meanings in these Articles of Association, viz., annual GMS and extraordinary GMS unless explicitly specified otherwise.
In annual GMS:
The Board of Directors shall present:
The annual report reviewed by the Board of Commissioners to obtain the approval of the GMS;
Financial reports to obtain the approval of the meeting;
The allocation of profits shall be determined, if the Company has a positive profit balance;
Other GMS agenda items duly submitted with attention to the provisions of the articles of association shall be resolved upon.
Approval of the annual reports and ratification of the financial reports by the annual GMS shall mean giving a full acquittal and discharge from liability to the members of the Board of Directors and Board of Commissioners for the management and supervision carried out during the preceding financial year, in so far as such actions are reflected in the Annual Reports and Financial Reports.
An extraordinary GMS may be convened at any time based on need to discuss and resolve upon agenda items except for the agenda items contemplated in paragraph (3) subparagraphs a and b, with due attention to legislative regulations and the Articles of Association.
PLACE, INVITATIONS TO AND CHAIRING OF GMS
ARTICLE 9
GMS shall be held at the Company's domicile.
GMS shall be convened by prior invitation to the shareholders by recorded delivery letter and/or by advertisement in newspapers.
Invitations shall be given no later than 14 (fourteen) days before the date on which the GMS are held excluding the date of the invitation and the date on which the GMS is held.
GMS shall be presided over by the President Director. Additionally as another alternative, GMS may be provided over by the President Commissioner.
If the President Director is not present or is unavailable for any reason whatsoever, which need not be proven to third parties, the GMS shall be presided over by the Vice President Director.
If the Vice President Director is not present or is unavailable for any reason whatsoever, which need not proven to third parties, the GMS shall be presided over by a Director designated by the President Director or Vice President Director.
If no Directors are present or available for any reason whatsoever, which need not be proven to third parties, the GMS shall be presided over by a member of the Board of Commissioners.
If no members of the Board of Commissioners are present or available for any reason whatsoever, which need not be proven to third parties, the GMS shall be presided over by a person chosen by and from among those present in the meeting.
GMS QUORUMS, VOTING RIGHTS, AND RESOLUTIONS
ARTICLE 10
GMS may be held if the quorum to be present required in the Limited Liability Companies Act has been met.
Voting regarding a person shall be done by sealed, unsigned, ballot paper, and regarding other matters shall be done orally unless the chair of the GMS determines otherwise without any objection from the shareholders present in the GMS.
Blank or unlawful votes shall be deemed non-existent and not counted in determining the number of votes cast in the GMS.
GMS may adopt resolutions on the basis of deliberation to reach a consensus or based on votes in favor out of the number of votes cast in the GMS as specified in the Act.
THE BOARD OF DIRECTORS
ARTICLE 11
The Company shall be managed and led by a Board of Directors consisting of two (2) members of the Board of Directors.
If more than one director is appointed, one person from among them may be appointed as The President Director.
The members of the Board of Directors may be appointed by the General Meeting of Shareholders for a period of five (5) years without prejudice to the right of the General Meeting of Shareholders to dismiss them at any time.
If for any reason whatsoever the positions of one or more or all of the members of the Board of Directors become vacant, then within 30 (thirty) days as from the when the vacancy occurs, a General Meeting of Shareholders must be held to fill the vacancy with due attention to the provisions of legislative regulations and the Articles of Association.
If for any reason whatsoever all positions of the members of the Board of Directors are vacant, then for the time being, the Company shall be managed by the members of the Board of Commissioners appointed by a meeting of the Board of Commissioners.
The members of the Board of Directors are entitled to resign from their positions by written notice to the Company at least 30 (thirty) days before the date of their resignation.
The position of a member of the Board of Directors shall expire, if the member:
Resigns in accordance with the provisions of paragraph (6);
No longer fulfills the requirements of legislative regulations;
Dies;
Is dismissed by virtue of a resolution of the General Meeting of Shareholders.
TASKS AND AUTHORITY OF THE BOARD OF DIRECTORS
ARTICLE 12
The Board of Directors is entitled to represent the Company inside and outside the Courts with regard to all matters and in all eventualities, to bind the Company to other parties and other parties to the Company, and to take all actions with regard to management and ownership, but with the limitation that to:
Borrow or lend money on behalf of the Company (not including withdrawing the Company's money from the Bank);
Establish a company or to invest in another company at home or abroad; the action must be with the approval of the Board of Commissioners.
a. The President Director is entitled and authorized to act for and on behalf of the Board of Directors and represent the Company.
b. In the event that the President Directors present or is unavailable for any reason whatsoever, which need not be proven to third parties, one of the other members of the Board of Directors shall be entitled and authorized to act for and on behalf of the Board of Directors and represent the Company.
MEETINGS OF THE BOARD OF DIRECTORS
ARTICLE 13
Meetings of the Board of Directors may be convened at any time considered necessary:
By one or more members of the Board of Directors;
At the written request of one or more members of the Board of Commissioners; or
At the written request of 1 (one) or more shareholders who jointly represent 1/10 (one tenth) or more of the total number of shares with voting rights.
Invitations to Meetings of the Board of Directors may be issued by the member of the Board of Directors entitled to act for and on behalf of the Board of Directors in accordance with the provisions of Article 9 of these Articles of Association.
Invitations to Meetings of the Board of Directors shall be delivered by recorded delivery letter or hand-delivered letter to each member of the Board of Directors against receipt no later than 3 (three) days before the meeting is held, excluding the date of the invitation and the date of the meeting.
Invitations to meetings must state the agenda, date, time, and place of the meeting.
Meetings of the Board of Directors shall be held at the Company's domicile or at the Company's place of business. If all members of the Board of Directors are present or represented, no prior invitation is required and the Meeting of the Board of Directors may be held at any place and shall be entitled to adopt lawful and binding resolutions.
Meetings of the Board of Directors shall be presided over by the President Director. In the event that the President Director is not present or is unavailable for any reason whatsoever, which need not be proven to third parties, the Meeting of the Board of Directors shall be presided over by a member of the Board of Directors chosen by and from among the members of the Board of Directors present.
A member of the Board of Directors may be represented in a Meeting of the Board of Directors only by another member of the Board of Directors by virtue of a power of attorney.
Meetings of the Board of Directors shall be valid and entitled to adopt binding resolutions if more than 1 2 (one half) of the number of members of the Board of Directors is present or represented in the Meeting.
Resolutions of the Meeting of the Board of Directors shall be adopted by virtue of deliberation to reach a consensus, failing which resolutions shall be adopted by affirmative vote of at least more than 1 2 (one half) of the number of votes cast in the Meeting.
In the event of a tie vote, the chair of the Meeting of the Board of Directors shall decide.
a. Each member of the Board of Directors present is entitled to cast 1 (one) vote and 1 (one) additional vote for each other member of the Board of Directors he/she represents.
b. Voting regarding an individual shall be done by sealed, unsigned ballot papers, while voting regarding other matters shall be done orally unless the chair of the meeting specifies otherwise without any objection from those present.
c. Blank and invalid votes shall be deemed not lawfully cast and non-existent, and shall not be counted in determining the number of votes cast.
The Board of Directors may also adopt lawful resolutions without holding a Meeting of the Board of Directors, with the proviso that all members of the Board of Directors are informed in writing and all members of the Board of Directors give their approval of the motion submitted in writing by signing their approval.
Resolutions adopted in such a manner shall have the same legal effect as resolutions lawfully adopted in a Meeting of the Board of Directors.
BOARD OF COMMISSIONERS
ARTICLE 14
The Board of Commissioners shall consist of one or more members of the Board of Commissioners. If more than one member of the Board of Commissioners is appointed, one person from among them may be appointed as President Commissioner.
Members of the Board of Commissioners shall be appointed by the General Meeting of Shareholders for a period of five (5) years without prejudice to the right of the General Meeting of Shareholders to dismiss them at any time.
If for any reason the position of a member of the Board of Commissioners becomes vacant, then within 30 (thirty) days as from when the vacancy occurred, a General Meeting of Shareholders must be convened to fill the vacancy with due attention to the provisions of paragraph 2 of this article.
A member of the Board of Commissioners is entitled to resign from his/her position by notifying the Company of their intention in writing at least 30 (thirty) days before the date of resignation.
The position of members of the Board of Commissioners shall expire if they:
Lose their Indonesian Citizenship;
Resign in accordance with paragraph 5;
No longer fulfill the requirements of prevailing legislative regulations;
Die;
Dismissed by virtue of a resolution of the General Meeting of Shareholders.
TASKS AND AUTHORITY OF THE BOARD OF COMMISSIONERS
ARTICLE 15
The Board of Commissioners are entitled at any time during the Company's office hours to enter the buildings or grounds or other places used or controlled by the Company and entitled to examine all books, letters and other evidence, to examine and check the cash situation etc. and entitled to know of all actions undertaken by the Board of Directors.
The Board of Directors and each member of the Board of Directors is obliged to give explanations concerning everything queried by the Board of Commissioners.
If all the members of the Board of Directors is suspended and the Company does not have any members of the Board of Directors, then for the time being, the Board of Commissioners shall be obliged to manage the Company. In such a case, the Board of Commissioners is entitled to give a temporary power of attorney to one or more persons from among the members of the Board of Commissioners on the responsibility of the Board of Commissioners.
In the event that there is only one member of the Board of Commissioners, all tasks and authority given to the President Commissioner or a member of the Board of Commissioners in these articles of association shall also apply to that person.
MEETINGS OF THE BOARD OF COMMISSIONERS
ARTICLE 16
The provisions contemplated in Article 13 shall apply mutatis mutandis to meetings of the Board of Commissioners.
WORKING PLAN, FINANCIAL YEAR AND ANNUAL REPORTS
ARTICLE 17
Before the financial year begins, the Board of Directors shall present a working plan containing also an annual budget for the Company to the Board of Commissioners to obtain its approval.
The working plan contemplated in paragraph (1) must be presented no later than 10 days before the beginning of the coming financial year.
The Company's financial year shall run from 1 (the first of) January to 31 (the thirty-first of) December. At the end of December each year, the Company's books shall be closed. For the first time, the Company's books shall begin on the date of this deed of establishment and close on 31 (the thirty-first of) December 2015.
The Board of Directors shall compile an annual report and make it available at the Company's offices to be examined by the shareholders as from the date of the invitation to the annual GMS.
ALLOCATION OF PROFITS AND SHARING OUT OF DIVIDENDS
ARTICLE 18
The Company's net profits in a financial year as stated in the balance sheet and profit and loss statement ratified by the annual GMS shall if constituting a positive balance of profits be divided up in the manner specified by the GMS for their allocation.
If the profit and loss statement in a financial year shows a loss which cannot be covered by the reserve fund, the loss shall remain recorded and entered in the profit and loss statement and in the next financial years the Company shall be deemed not to have earned a profit for as long as the loss recorded and entered in the profit and loss statement has not been completely covered.
USE OF RESERVES
ARTICLE 19
Net profits shall be set aside for reserves until 20% (twenty per cent) of the amount of subscribed and paid up capital is reached and may only be used to cover losses not met by other reserves.
If the amount of the reserves exceeds 20% (twenty per cent), the GMS may resolve that the excess be used for the Company's needs.
The reserves contemplated in paragraph (1) which have not been used to cover losses and any excess reserves contemplated in paragraph (2) whose use has not been determined by the GMS must be managed by the Board of Directors in a manner which in the consideration of the Board of Directors seems appropriate in order to obtain a profit after obtaining the approval of the Board of Commissioners and with due attention to legislative regulations.
CLOSING PROVISIONS
ARTICLE 20
Anything not or insufficiently provided for in these Articles of Association shall be decided in the GMS.
Lastly, the appearances acting in their capacities as aforesaid declare that:
For the first time there have been subscribed and paid up in full in cash via the Company's cash desk eight (8) shares or total nominal value of Rp. 48,000,000 by the founders:
Mr. Alfa, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Bravo, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Charlie, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Delta, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Echo, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Foxtrot, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Genie, 1 (one) share with a total nominal value of Rp. 6,000,000
Mr. Helen, 1 (one) share with a total nominal value of Rp. 6,000,000
And total is eight (8) shares
With a total value of Rp. 48,000,000
Notwithstanding the provisions in Articles 8 and 11 of these Articles of Association with regard to the procedure for the appointment of members of the Board of Directors and Board of Commissioners, the following have been appointed to the following positions:
President Director: Mr. Josept born in Medan, 23 October 1980 on privately employed, Indonesia citizen, residing in Jalan Merpati No 7b, holder of Citizen's, Identity Card Number 1271395667650001.
Director: Mr. James born in Medan, 3 October 1981 on privately employed, citizen, Indonesia residing in Jalan Gagak Tua No 92, holder of Citizen's, Identity Card Number 1271397534610005.
Commissioner: Mr. Janet born in Medan, 25 February 1979 on privately employed, citizen, Indonesia residing in Jalan Seikambing No 137, holder of Citizen's, Identity Card Number 1271395802860005.
The appointments of the members of the Board of Directors and Board of Commissioners have been accepted by those concerned.
IN WITNESS WHEREOF
This Deed has been made and executed in 14:00:00 on the day and date mentioned in the preamble to this deed in the presence of:
Jonathan Silalahi, SH
Benny Setiawan, SH
Both employees of the Notary's office and residing in Jalan Ghandi No 140 and Jalan Surdiman No 23 respectively as witnesses.
Immediately after this deed was read out by me, the Notary to the Appearances and the witnesses, this deed was signed by the appearances, the witnesses, and me, the Notary.