In accordance with Indonesian Company Law No. 40 year 2007 (Undang-Undang Republik Indonesia nomor 40 Tahun 2007 tentang Perseroan Terbatas) a “Limited Liability Company” (PT-Perseroan Terbatas) means a legal entity which constitutes a coalition of capital established agreeable to a contract in order to carry out business activities with an authorized capital all of which is divided into shares.
A “Limited Liability Company” (PT-Perseroan Terbatas) constitute 3 (three) “Company Organs” namely General Meeting of Shareholders (GMS), Board of Directors and Board of Commissioners. All the organs of the company must work accordingly to acheive the company’s objectives and goals. Below we discuss the brief definition, Obligations and Liabilities of Board of Commissioners.
Board of Commissioners
The Board of Commissioners is an organ of the Company that has the responsibility to conduct a general and/or specific supervision , in accordance with the articles of association of company, as well as providing advice for Board of Directors. The Board of Commissioners conduct supervision over the management policy, the implementation of the management in general, either regarding the Company or its business, and provides advice to the Board of Directors regarding company’s intersets in accordance with the purpose and objective of the Company. The Board of Commissioners of an Indonesian Limited Liablility Company must consist of at least 1 (one) member but the Company which engages in mobilizing public funds and/or issuing debt instrument shall have a minimum of 2 (two) members in Board of Commissioners. Members of the Board of Commissioners are appointed by GMS (General Meeting of Shareholders) for a certain period of time stipulated in company’s article of association.
Obligations and Responsibilites of Board of Commissioners:
- The Board of Commissioners is responsible to supervise the Company in management policy, the implementation of the management in general, either regarding the Company or its business, and provides advice to the Board of Directors.
- Each member of the Board of Commissioners is obliged with good faith, prudent and full responsibility to perform his supervisory duty and provide advices to the Board of Directors.
- The Board of Commissioners is obliged to :
- prepare a minutes of meeting of the Board of Commissioners and keep the copy thereof;
- manage report of Company shares ownership; and
- submit a report to GMS regarding the supervisory duty which has been performed within the previous accounting year.
- Board of Commissioners may perform the management over the Company in a certain condition for a certain period of time if stipulated in the articles of association or the resolution of GMS.
Each member of the Board of Commissioners is personally liable for the loss/ bankruptcy suffered by the Company if it resulted from its fault or negligent in performing its duties. But Members of the Board of Commissioners are not liable over the Company’s loss/bankruptcy if it is proven that :
- the loss is not resulted from its fault or negligence;
- it has conducted the management over the Company with good faith and prudent principle for the interest of the Company in accordance with its purpose and objective; and
- it has no, either directly or indirectly, personal interest over the Company’s management which caused the loss; and
- it has provided advice to the Board of Directors in order to prevent the occurrence of such loss.