Company Law in Indonesia

1. Conflicts between interests that occur can be resolved through an independent third party as the mediator of the owner and agent. This third party functions to monitor the behavior of managers as agents and ensure that agents act in the interests of the owner. I am of the opinion that to overcome the problems between the principal and the agent, an independent third party is needed. The independent third party referred to is an independent external auditor, the agent can prove that the trust of the owner is not diverted for the agent's personal interests.

 Principals can also have greater confidence in the agent and can know how well the condition of the company is under the decision of an agent or management as an agent. In order to reduce and minimize the occurrence of costs, it is necessary to attend share ownership by managers, because by owning company shares and company transparency, managers feel the direct benefits of each policy they make.

Thus management will make rational and small decision policies that may not cause (agency cost) because management can feel directly the benefits of the decisions it takes due to owning shares in the company and third parties as independent are tasked with continuing to monitor and audit all activities and movements within the company. Thus a conflict of interest between the owner of the company and a small management is likely to occur such as:

a. Problems that arise if the agent does not implement things that have been agreed upon in the employment contract.

b. A situation where the principal cannot know whether a decision taken by the agent is really based on the information that has been obtained, or occurs as a negligence in carrying out the task.

2. Shares are one of the elements that cannot be separated from a Limited Liability Company. Shares are a sign of equity participation in a company (PT) as proof of capital ownership. Based on Article 48 paragraph (1) of the Company Law, the shares are issued in the name of their owners so that they become proof of ownership of the shares of a PT. Parties who will or want to own shares must meet the stock ownership requirements that can be stipulated in the Articles of Association of the Company by taking into account the requirements set by the competent agency in accordance with the provisions of the legislation. If in the event that the requirements for share ownership have been determined and are not fulfilled, the party that obtains such share ownership cannot exercise the rights as shareholders and the shares are not counted in the quorum which must be achieved in accordance with the provisions of the Company Law and / or articles of association; which is regulated in Article 48 paragraph (2) and (3) of the Company Law. The level of ownership is seen from the number of percentage shares where each share has been listed. Based on Article 49 of the Company Law, the nominal value of a share must be stated in rupiah, shares without a nominal value cannot be issued. In this case there is no possibility regulated expenditure of shares without nominal value in the laws and regulations in the field of capital markets.

Ownership of a share gives rights to shareholders. These rights are regulated in Article 52 paragraph (1) of the Company Law, namely:

a. Attending and issuing votes at the GMS;

b. Receiving dividend payments and the remaining assets resulting from liquidation:

c. Carry out other rights under the Company Law

In my opinion, the application of nominal shares will not have much impact on investors. Because all this time, public investors count the issuers of their book value, namely total equity divided by the number of shares circulating in the market. If you want the rules to abolish the share nominal value to be valid, then the Company's Corporate Law is harmonized first. Because if there is no alignment. Then the company's capital can be zero. There must be no clash of Company Laws in force in Indonesia. If it is aligned with the elimination of the share nominal value, there will be no more problems.

3. Regulations regarding the annual report of a limited liability company are regulated in Chapter IV of Law Number 40 of 2007 concerning Limited Liability Companies ("Company Law"). The following below will describe the mechanism for submitting an Annual Report to the GMS.

The Board of Directors is in charge of making the company's annual report, and then submitted to the board of commissioners for review and after that it is only submitted to the General Meeting of Shareholders ("GMS"). The grace period for submitting an annual report to the GMS is no later than 6 (six) months after the company's financial year ends, as stipulated in Article 66 paragraph (1) of the Company Law.

Based on Article 66 paragraph (2) of the Company Law, the annual report must contain:

a. financial statements, at least load the balance sheet at the end of the past financial year in comparison with the previous financial year,

b. income statement of the relevant financial year,

c. cash flow statement,

d. report on changes in equity and notes to the financial statements.

e. report on the company's activities.

f. report on the implementation of social and environmental responsibility.

Details of problems that arise during the financial year that affect the company's business activities.

Reports on employee duties that have been carried out by the board of commissioners during the recent financial year.

Names of members of the board of directors and members of the board of commissioners.

Salaries and reviews for members of the board of directors and salary or honorarium and benefits of the board of commissioners of the company for the past year.

These financial statements must be prepared based on financial accounting standards. These financial accounting standards are the standards set by the Indonesian Professional Accountants Organization and are recognized by the Government of the Republic of Indonesia.

In my opinion, in the Indonesian Company Law, sanctions are not actually regulated if the Annual General Meeting of Shareholders is not held at the latest 6 (six) months after the fiscal year ends. six) months after the financial year ends. However, the Board of Directors is still obliged to hold the Annual GMS as one of its obligations to run the company's management as well as possible by providing the Company's annual report at the Annual GMS. It was also emphasized that in principle the Annual GMS was held to ratify the legal actions of directors, work plans, allocation of funds, as well as reports on the activities of PT, balance sheets and so on. In the Company Law, it is not stated how it will last six months after the financial year ends and no Annual GMS is held. But logically, if there is no endorsement, the PT's responsibility has not been completed in that year. Therefore, if it has passed 6 months after the fiscal year has ended, then the annual GMS may no longer be made. Thus, the accountability report, the use of PT's assets and others carried out by the directors in that year cannot be ratified.

4. A Company obtains status as a legal entity on the date of the issuance of a ministerial decree in this case the Minister of Law and Human Rights concerning the ratification of a corporate legal entity

This is as stipulated in Article 7 paragraph 4 of Law No. 40 of 2007 concerning Limited Liability Companies (UUPT) reads: "The Company obtains legal entity status on the date of issuance of a Ministerial Decree concerning the ratification of the Company's legal entity".

After knowing when the Company has its status as a legal entity, we now enter into its responsibilities. The responsibility of the board of directors for all legal actions of the Company that have not been incorporated is the responsibility of the board of directors personally and / or together with other corporate organs such as the Board of Commissioners or Founder (shareholders). So if the company suffers a loss, the directors' personal assets can be confiscated to pay for the losses incurred.

This can be seen in Article 14 paragraph (1) of the Company Law which states "legal actions on behalf of the Company that have not yet obtained Legal Entity status, may only be carried out by all members of the Board of Directors together with all founders and all members of the Company's Board of Commissioners, and they are all responsible jointly answer the legal actions ".

Furthermore, in the event that the Company has a legal entity, the directors are not personally responsible for any legal actions carried out on behalf of the Company. So if the Company suffers a loss, then the confiscation is only the company's assets. Directors' assets may not be confiscated.

This last thing is indeed not strictly regulated in the Company Law, but from article 14 paragraph 1 of the Company Law above, we can understand it by interpreting it in reverse (a contrario). Coupled with several Supreme Court decisions, such as the Supreme Court Decision No. 268 K / Sip / 1980, Decision of MA No. 597 K / Sip / 1983 which is the core of its decision adheres to the principle that legal actions of directors on behalf of the Company that have legal entities are the responsibility of the Company as a legal entity and are not the responsibility of the directors personally. So if there is a loss, the assets of the Company and the personal assets of the directors may not be confiscated.

In my opinion, the actions of the directors on behalf of a company that has not been incorporated are the responsibility of the other directors and organs of the company. Meanwhile, the actions of the directors on behalf of the Company that have been incorporated are the responsibility of the Company and not the personal responsibility of the directors anymore.

5. Basically, banks carry out the principle of trust provided by depositors to maintain the confidentiality of their customer's accounts. Because the relationship between banks and customers is confidential. This is often referred to as bank secrets. This bank's secret term refers to matters relating to the interaction between the bank and its customers. The customer certainly does not expect the bank to notify third parties about the customer's financial condition.

The confidentiality of information born in this banking activity is basically more for the interests of the bank itself, because as a financial institution, trust is a priority in carrying out its activities. To guarantee this, the government has the rights of customers with laws, namely banking laws.

The concept of bank secrets starts from the purpose of protecting the customer concerned. The idea was to keep the financial condition of bank customers secret so that the birth of legal provisions regarding bank secret obligations was originally intended to protect the interests of customers individually.

Because the activities of the world of banking manage public money, banks are required to maintain the trust given by the community. Banks must maintain the security of the money to be truly safe. In order to ensure the security of the money of its customers, banks are prohibited from providing information recorded with the bank about the financial condition and other matters of their customers. In other words, the bank must keep a secret about the customer's financial situation and if it violates this confidentiality the bank will be subject to sanctions

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