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Shareholders' Measures to Face Deadlock Situations in Company (Upaya Pemegang Saham Menghadapi Situasi Deadlock Dalam Perusahaan)
Upaya Pemegang Saham Menghadapi Situasi Deadlock Dalam Perusahaan) ~blog/2025/7/15/website' />Upaya Pemegang Saham Menghadapi Situasi Deadlock Dalam Perusahaan)' />Kiki Setiawan & Partners Law Office provides legal consultancy related to Corporate, Commercial, Investment and Financing legal matters, please call us at +62 21 2963 8070 or drop us an email at mail@ksplaw.co.id
In a company (or limited liability company) or Joint Venture Company, shareholders have different roles, interests, and share ownership amounts. Each share owned grants the shareholder rights and responsibilities, such as voting rights, dividend rights, rights to remaining assets resulting from liquidation and so forth. Shareholders in a General Meeting of Shareholders (GMS), which is the highest organ in a company, can also determine the occurrence of corporate actions. The Board of Directors is required to hold at least one GMS annually, commonly known as the Annual GMS. Often, shareholders to experience disagreements and differences of opinion, which can lead to deadlock in decision-making.
As a result, shareholders have several measures that can be taken against the shares they own or against company, including:
1. Selling their shares to a third party
The first way is to offer shares to a third party to replace the shareholder's position in company. But of course, there are things that must be considered in selling shares. This is regulated in Articles 56-59 of Law Number 40 of 2007 on Limited Liability Company (Indonesian Company Law), i.e.:
a. Must first be offered to the other existing shareholders. If the other shareholders do not purchase the shares within 30 days after the offer is made, then the shares can be offered and sold to third parties.
b. Must obtain approval from Company organs (General Meeting of Shareholders (GMS), Board of Directors and/or Board of Commissioners). Shareholders who wish to sell their shares must request approval for the transfer of rights. Within 90 days of the request, Company Organ must provide a written response regarding its approval or rejection.
c. Must obtain approval from the authorized agency in accordance with the provisions of laws and regulations.
d. A deed of transfer of rights over shares must be made to document the transfer of rights to the shares to the purchaser, whether a third party or another shareholder. This deed can be either a notarial deed or a privately made deed.
It should be noted that if company has only two shareholders, and shareholder A sells his shares to shareholder B, then shareholder B in company will become the sole shareholder. This will have consequences for shareholder B, as stipulated in Article 7 of Indonesian Company Law. Within a maximum period of six months, shareholder B must transfer some of its shares to another person or company issues new shares to other persons.
If that period is exceeded and shareholder B is still the sole shareholder, then the shareholder shall be personally liable for all obligations and losses of company arising after the exceeding of such six-month period and at the request of any interested party (the public prosecutor, shareholders, Board of Directors, Board of Commissioners, employees of company, creditors and/or stakeholders), the district court may dissolve company.
2. Request Company to repurchase its shares (shares buyback)
Shareholders have the right to request company to buy back their shares at a fair price. The procedure for conducting a buyback in a closed company is mandatory with the approval of the GMS. The requirements that need to be considered in the buyback are:
a. the buyback of shares does not cause company's net assets to become smaller than the amount of issued capital plus mandatory reserves that have been set aside;
b. the total nominal value of all shares repurchased by company and pledge of shares or fiduciary guarantee of shares held by company itself and/or other companies whose shares are directly or indirectly owned by company, does not exceed 10% of the total issued capital of company; and
c. Shares bought back by company may only be held by company for a maximum of 3 years. Within this period, company can determine whether the shares will be sold or withdrawn by means of a capital reduction.
3. Dissolving company
This can be done if all shareholders have felt that company's objectives can no longer be achieved with differences of opinion and views between all shareholders. This is in line with Indonesian Company Law which states that the dissolution of company can occur based on a GMS Resolution. Those who can propose the dissolution of company are Board of Directors, Board of Commissioners or a shareholder representing at least 10% of the total number of shares.
Approval of the dissolution of company will mark the beginning of the liquidation process. Company will only lose its legal entity status when the liquidation is completed, and the liquidator's accountability is accepted by GMS or the court. The process of liquidation that must be carried out by the liquidator are:
a. recording and collection of company's assets and debts;
b. the announcement in a Newspaper and the State Gazette of the Republic of Indonesia of the plan for the distribution of the liquidation proceeds;
c. payment to the creditors;
d. payment of the remaining assets of the liquidation proceeds to the shareholders; and
e. other actions necessary to be taken in the assets distributions.
Selling shares to a third party requires careful consideration and calculation, including an assessment of the company's track record, achievements, the presence of business conflicts, and the continued existence of partnerships with other companies. A shareholder's decision to dissolve a company often results from a deadlock among the shareholders, which not only results in losses for the established business but also for other stakeholders, such as creditors and employees.
Click DOWNLOAD PDF to read the Indonesian version of this Article
In a company (or limited liability company) or Joint Venture Company, shareholders have different roles, interests, and share ownership amounts. Each share owned grants the shareholder rights and responsibilities, such as voting rights, dividend rights, rights to remaining assets resulting from liquidation and so forth. Shareholders in a General Meeting of Shareholders (GMS), which is the highest organ in a company, can also determine the occurrence of corporate actions. The Board of Directors is required to hold at least one GMS annually, commonly known as the Annual GMS. Often, shareholders to experience disagreements and differences of opinion, which can lead to deadlock in decision-making.
As a result, shareholders have several measures that can be taken against the shares they own or against company, including:
1. Selling their shares to a third party
The first way is to offer shares to a third party to replace the shareholder's position in company. But of course, there are things that must be considered in selling shares. This is regulated in Articles 56-59 of Law Number 40 of 2007 on Limited Liability Company (Indonesian Company Law), i.e.:
a. Must first be offered to the other existing shareholders. If the other shareholders do not purchase the shares within 30 days after the offer is made, then the shares can be offered and sold to third parties.
b. Must obtain approval from Company organs (General Meeting of Shareholders (GMS), Board of Directors and/or Board of Commissioners). Shareholders who wish to sell their shares must request approval for the transfer of rights. Within 90 days of the request, Company Organ must provide a written response regarding its approval or rejection.
c. Must obtain approval from the authorized agency in accordance with the provisions of laws and regulations.
d. A deed of transfer of rights over shares must be made to document the transfer of rights to the shares to the purchaser, whether a third party or another shareholder. This deed can be either a notarial deed or a privately made deed.
It should be noted that if company has only two shareholders, and shareholder A sells his shares to shareholder B, then shareholder B in company will become the sole shareholder. This will have consequences for shareholder B, as stipulated in Article 7 of Indonesian Company Law. Within a maximum period of six months, shareholder B must transfer some of its shares to another person or company issues new shares to other persons.
If that period is exceeded and shareholder B is still the sole shareholder, then the shareholder shall be personally liable for all obligations and losses of company arising after the exceeding of such six-month period and at the request of any interested party (the public prosecutor, shareholders, Board of Directors, Board of Commissioners, employees of company, creditors and/or stakeholders), the district court may dissolve company.
2. Request Company to repurchase its shares (shares buyback)
Shareholders have the right to request company to buy back their shares at a fair price. The procedure for conducting a buyback in a closed company is mandatory with the approval of the GMS. The requirements that need to be considered in the buyback are:
a. the buyback of shares does not cause company's net assets to become smaller than the amount of issued capital plus mandatory reserves that have been set aside;
b. the total nominal value of all shares repurchased by company and pledge of shares or fiduciary guarantee of shares held by company itself and/or other companies whose shares are directly or indirectly owned by company, does not exceed 10% of the total issued capital of company; and
c. Shares bought back by company may only be held by company for a maximum of 3 years. Within this period, company can determine whether the shares will be sold or withdrawn by means of a capital reduction.
3. Dissolving company
This can be done if all shareholders have felt that company's objectives can no longer be achieved with differences of opinion and views between all shareholders. This is in line with Indonesian Company Law which states that the dissolution of company can occur based on a GMS Resolution. Those who can propose the dissolution of company are Board of Directors, Board of Commissioners or a shareholder representing at least 10% of the total number of shares.
Approval of the dissolution of company will mark the beginning of the liquidation process. Company will only lose its legal entity status when the liquidation is completed, and the liquidator's accountability is accepted by GMS or the court. The process of liquidation that must be carried out by the liquidator are:
a. recording and collection of company's assets and debts;
b. the announcement in a Newspaper and the State Gazette of the Republic of Indonesia of the plan for the distribution of the liquidation proceeds;
c. payment to the creditors;
d. payment of the remaining assets of the liquidation proceeds to the shareholders; and
e. other actions necessary to be taken in the assets distributions.
Selling shares to a third party requires careful consideration and calculation, including an assessment of the company's track record, achievements, the presence of business conflicts, and the continued existence of partnerships with other companies. A shareholder's decision to dissolve a company often results from a deadlock among the shareholders, which not only results in losses for the established business but also for other stakeholders, such as creditors and employees.
Click DOWNLOAD PDF to read the Indonesian version of this Article
Upaya Pemegang Saham Menghadapi Situasi Deadlock Dalam Perusahaan)' />Latest KSP LEGAL ARTICLES
