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Finding Out What Makes This Document So Important

As Indonesia moves on to attract more foreign investment, both local and international entrepreneurs are setting up offices like hotcakes. Before getting serious in a business, the first thing you need to do is to come up with a business plan. If you already have that settled, then comes the fun part, incorporate a company. Apart from getting all the necessary documents ready for the incorporation, the Articles of Association is as critical as well. The Articles of Association for Indonesia company pretty much sums up what your company is all about. It is likened to a resume of the company.

 

Part of a Deed

According to the Company Law in Indonesia, the establishment of a company requires a deed of establishment. The deed must contain the Articles of Association (AoA) and other relevant information of the company. The AoA has regulations and management details of a company. Hence, new company establishment must understand the contents of an Articles of Association.

 

Detailed Information

The contents of an Articles of Association for Indonesia company is as the following (in no particular order):

Name and Location (Domicile)

A local company establishment is called a PT, and a foreign company is called a PT PMA. Both company establishment must have the name of their respective company. As with other countries’ law, a new company name must respect intellectual property and trademarks law. This is to avoid complications with other companies registered with a similar name. It is best to check with the Ministry of Law and Human Rights, or you can contact us and show us your list of proposed names for your company. We can help sort you out to ensure you comply with the regulations set in the Company Law. Besides an identity, the company must also obtain the certificate of domicile from the local government office. The domicile of the company should be its headquarters, and the company’s address must be within its domicile. It will be the official company’s corresponding address.

Company’s Goal, Objective and Nature of Business

All companies set up should have a goal. Otherwise, the company is without direction. A clear-cut plan will define the objective of the company. From then, the business owner can describe the nature of the business and the activities the company will carry out upon incorporation.

Period of Incorporation

For other countries, a new company can remain established for as long as it is active. But, Article 6 of the Indonesia Company Law states that a company establishment needs to stay incorporated for a limited or unlimited term, as specified in the Articles of Association for Indonesia company. Business owners can apply for the legal period of company incorporation through an application to the Ministry of Law and Human Rights. The online application is submitted via an online system, stating the period of the company incorporation.

Capital, Shares and Dividends

The Articles of Association for Indonesia company must contain the amount of the authorised capital, issued capital and paid-up capital. If shares limit the new company establishment, the AoA should state the number of shares, classification of shares, the rights to each stake and its nominal value. Whenever the company makes profits, it should allocate for dividends. With that, the use of profits should also be definitive in the AoA.

Board Members

An AoA must provide details of each Board members, namely; Board of Directors and Board of Commissioners of the Company. Besides that, the Articles of Association for Indonesia company must also mention the procedures of appointment, replacement and dismissal of Board members.

Shareholders General Meeting

Whenever there are shareholders to a company, there will be the necessity to hold a General Meeting of Shareholders. The AoA should conclusively state the place and procedure to regulate the General Meeting.

 

Other Provisions

Besides the above details, a new company establishment may include other provision as needed by the company. For every provision added, business owners must comply with the Company Law. Thus, getting assistance from your local advisor will be your best bet.