KSP Legal Articles
Is Board of Commissioners authorized to sign transactional documents on behalf of a company?
Law Number 40 of 2007 regarding Limited Liability Company (“Company Law”) provides definition of the Board of Commissioners (BOC) which is the Company organ in charge of conducting supervision in general and/or in particular in accordance with the Company’s articles of association and providing advice to the Board of Directors (BOD).
Article 108 of the Company Law further stipulates that the BOC performs supervisory duties on management policy, the general performance of management, regarding both the Company and the Company's business, and provides advice to the BOD. However, these roles and duties may be specified in the Company’s Articles of Association that are approved by the Company’s shareholders and not contradictory with the said stipulation. For instance, the BOC is entitled to check all books, agreements and company’s documents as well as to check financial conditions at any time.
Implementation of these roles and duties cannot be hindered by the BOD because the BOC and the BOD are basically company organs that have the same position with different functions. Both members of the BOD and the BOC are appointed and terminated by and has direct responsibility to the Company's shareholders. Unlike the BOD, which allows each member of the BOD to act independently in carrying out its roles and duties, each member of the BOC cannot act individually in carrying out its roles and duties, except based on a decision of the BOC.
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Read MoreArticle 108 of the Company Law further stipulates that the BOC performs supervisory duties on management policy, the general performance of management, regarding both the Company and the Company's business, and provides advice to the BOD. However, these roles and duties may be specified in the Company’s Articles of Association that are approved by the Company’s shareholders and not contradictory with the said stipulation. For instance, the BOC is entitled to check all books, agreements and company’s documents as well as to check financial conditions at any time.
Implementation of these roles and duties cannot be hindered by the BOD because the BOC and the BOD are basically company organs that have the same position with different functions. Both members of the BOD and the BOC are appointed and terminated by and has direct responsibility to the Company's shareholders. Unlike the BOD, which allows each member of the BOD to act independently in carrying out its roles and duties, each member of the BOC cannot act individually in carrying out its roles and duties, except based on a decision of the BOC.
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Women, Business and the Law 2020
This year, Mr. Setiawan, as the Managing Partner of Kiki Setiawan & Partners Law Office, was trusted to be one of Local Experts in Indonesia to contribute in the Women, Business and The Law 2020 Report.
The Report was released on 14 January 2020 which basically analyzes laws and regulations affecting woman’s economic inclusion in 190 economies, including Indonesia. Some indicators are included in the Report such as Mobility, Workplace, Pay, Marriage, Parenthood, Entrepreneurship, Assets and Pension.
According to the Report, the research finds some points to be highlighted:
1. Women have only three-fourths of the legal rights of men.
2. 40 economies have enacted 62 reforms toward gender equality.
3. Achieving legal gender equality is not only the right thing to do, but it is also good for a country’s economic growth and development.
4. The economies that improved the most are Saudi Arabia, the United Arab Emirates, Nepal, South Sudan, São Tomé and Príncipe, Bahrain, the Democratic Republic of Congo, Djibouti, Jordan, and Tunisia.
5. With a recent reform to parental leave, Canada joins seven other economies that score 100 on the Women, Business and the Law index: Belgium, Denmark, France, Iceland, Latvia, Luxembourg, and Sweden.
On this research, the indicators capture legal differences between men and women and Indonesia get overall WBL score of 64.4/100.0. Despite the score, it is belief that the Indonesian Government, Indonesian women civil society organizations and all relevant stakeholders will make some improvements and developments of woman’s inclusion in Indonesian economic on women empowerment and rights to get access to any sector and level of economic in the upcoming years. Click Download PDF below to read the full article
Read MoreThe Report was released on 14 January 2020 which basically analyzes laws and regulations affecting woman’s economic inclusion in 190 economies, including Indonesia. Some indicators are included in the Report such as Mobility, Workplace, Pay, Marriage, Parenthood, Entrepreneurship, Assets and Pension.
According to the Report, the research finds some points to be highlighted:
1. Women have only three-fourths of the legal rights of men.
2. 40 economies have enacted 62 reforms toward gender equality.
3. Achieving legal gender equality is not only the right thing to do, but it is also good for a country’s economic growth and development.
4. The economies that improved the most are Saudi Arabia, the United Arab Emirates, Nepal, South Sudan, São Tomé and Príncipe, Bahrain, the Democratic Republic of Congo, Djibouti, Jordan, and Tunisia.
5. With a recent reform to parental leave, Canada joins seven other economies that score 100 on the Women, Business and the Law index: Belgium, Denmark, France, Iceland, Latvia, Luxembourg, and Sweden.
On this research, the indicators capture legal differences between men and women and Indonesia get overall WBL score of 64.4/100.0. Despite the score, it is belief that the Indonesian Government, Indonesian women civil society organizations and all relevant stakeholders will make some improvements and developments of woman’s inclusion in Indonesian economic on women empowerment and rights to get access to any sector and level of economic in the upcoming years. Click Download PDF below to read the full article
Secondment and Transfer of Employee Under The Indonesian Manpower Law
The Indonesia Manpower Law Number 13 of 2003 provides definition of Secondment or Job Placement, where it is also known as ‘Penempatan Tenaga Kerja’ or ‘Mutasi Kerja’ as meant in Chapter VI Article 31 until Article 38 of the Indonesian Manpower Law. Secondment or Job Placement means employees can be placed to other company’s premises by the employer which best suits their skills, trade, capability, talents, interest and ability.
The employee may normally be placed by company which has representative or branch or associated companies either domestically or overseas for certain period of time. The Secondment may depend on the employer’s needs on the employee’s skills for projects.
As a result of the Secondment, the terms and conditions in the employment agreement between the original employer and the employee, including its rights and obligations remain unchanged. In particular, the payment of benefits during the work period and upon termination are still the original employer’s liabilities.
There is no new employment agreement shall be made between the new employer and the employee during the Secondment period. Further, any industrial relations dispute arises during Secondment or Job Placement period should be settled between the original employer and the employee through the Indonesian Industrial Relations Court. [Click Download PDF below to read the full article]
Read MoreThe employee may normally be placed by company which has representative or branch or associated companies either domestically or overseas for certain period of time. The Secondment may depend on the employer’s needs on the employee’s skills for projects.
As a result of the Secondment, the terms and conditions in the employment agreement between the original employer and the employee, including its rights and obligations remain unchanged. In particular, the payment of benefits during the work period and upon termination are still the original employer’s liabilities.
There is no new employment agreement shall be made between the new employer and the employee during the Secondment period. Further, any industrial relations dispute arises during Secondment or Job Placement period should be settled between the original employer and the employee through the Indonesian Industrial Relations Court. [Click Download PDF below to read the full article]
Prenuptial Agreement To Secure Marital Properties
In western countries, many engaged couples are open to enter into a prenuptial agreement. On contrary, people from eastern countries, particularly Indonesia, are considered prenuptial agreement as a lack of trust in a relationship. Ironically, people would tend to cancel their engagement in many cases due to this issue.
Indonesian marriage system refers to Law Number 1 of 1974 on Marriage (“Indonesian Marriage Law”). As defined in Article 35 of the Indonesian Marriage Law, marital property consists of all of the property obtained by the spouses, whether individually or jointly, during their marriage (also called joint property), excluding the personal property, grants and inheritance of the spouses.
All spouses’ properties and assets shall not be considered as marital property if the spouses enter into a Prenuptial Agreement (Perjanjian Perkawinan). Prenuptial agreement shall basically govern distribution of husband or wife’s properties and liabilities. In case of divorce or death of spouse, they can clearly identify their respective properties and liabilities.
Some stipulations on prenuptial agreement that should be taken into account is provided under Article 29 of the Indonesian Marriage Law:
1. The agreement should be ratified by Civil Registration Office (Kantor Catatan Sipil) and shall also be applied to any relevant third parties.
2. The agreement cannot be ratified if any provisions are contradictory to law, religion and morality.
3. The agreement shall become effective on the date of marriage registration and remain valid during the marriage.
4. During the marriage, the agreement cannot be changed unless otherwise agreed by both parties and it does not harm third parties.
Prenuptial agreement shall generally governs the following matters:
1. Separation of properties, assets and debts of each spouse. They should be clearly mentioned which assets will remain individual property and which will be shared. Further, management of assets of each spouse and household bills during the marriage.
2. Potential issues such as rights and obligations of each spouse during marriage, jobs, prohibition on doing domestic violence (Kekerasan Dalam Rumah Tangga - KDRT) and/or no fusion of assets and incomes.
3. Liabilities on legitimate child of the marriage for daily needs and education as well as child custody in case of divorce.
Article 29(1) of the Indonesian Marriage Law initially provides that prenuptial agreement can only be made ‘before or on the date of marriage’. This article was revised by Constitutional Court through its verdict Putusan Mahkamah Konstitusi Nomor 69/PUU-XIII/2015 Tahun 2015 which basically allow prenuptial agreement is made ‘during the marriage period’. It is also known as a Postnuptial Agreement.
This verdict has significant impact on the land ownership held by Indonesian who has married with foreigner, while she has not entered into a prenuptial agreement. It improves protection of land ownership of Indonesian land owner as mandated by Indonesian Agrarian Basic Law that adhere to the principle of ‘prohibition on land exile (gronds verponding verbood)’. It means that any land in Indonesian territory is prohibited to be possessed by non-Indonesian nationals.
In the event of any Indonesian loss his nationality due to marriage, inheritance or any other way, thus he should transfer his land ownership to any other third party, otherwise it will be taken over by the Indonesian government. Therefore, prenuptial agreement plays important role for different nationality spouse to secure and manage their immovable assets in Indonesia.
Besides the foregoing, there are actually some other benefits of entering into a prenuptial or postnuptial agreement such as controlling consumptive behavior of spouse to stabilize family’s financial life. Also, anticipating bad intention to acquire separate property after a divorce should be carefully considered, particularly for transnational marriage.
If one of the spouses is responsible for the debt, it shall only affect his/her assets, instead of marital property. Having the agreement in place, female spouse is allowed to establish a limited liability company and make cooperation with her husband because both spouses are not considered as an affiliated parties and no joint assets and interests.
Read MoreIndonesian marriage system refers to Law Number 1 of 1974 on Marriage (“Indonesian Marriage Law”). As defined in Article 35 of the Indonesian Marriage Law, marital property consists of all of the property obtained by the spouses, whether individually or jointly, during their marriage (also called joint property), excluding the personal property, grants and inheritance of the spouses.
All spouses’ properties and assets shall not be considered as marital property if the spouses enter into a Prenuptial Agreement (Perjanjian Perkawinan). Prenuptial agreement shall basically govern distribution of husband or wife’s properties and liabilities. In case of divorce or death of spouse, they can clearly identify their respective properties and liabilities.
Some stipulations on prenuptial agreement that should be taken into account is provided under Article 29 of the Indonesian Marriage Law:
1. The agreement should be ratified by Civil Registration Office (Kantor Catatan Sipil) and shall also be applied to any relevant third parties.
2. The agreement cannot be ratified if any provisions are contradictory to law, religion and morality.
3. The agreement shall become effective on the date of marriage registration and remain valid during the marriage.
4. During the marriage, the agreement cannot be changed unless otherwise agreed by both parties and it does not harm third parties.
Prenuptial agreement shall generally governs the following matters:
1. Separation of properties, assets and debts of each spouse. They should be clearly mentioned which assets will remain individual property and which will be shared. Further, management of assets of each spouse and household bills during the marriage.
2. Potential issues such as rights and obligations of each spouse during marriage, jobs, prohibition on doing domestic violence (Kekerasan Dalam Rumah Tangga - KDRT) and/or no fusion of assets and incomes.
3. Liabilities on legitimate child of the marriage for daily needs and education as well as child custody in case of divorce.
Article 29(1) of the Indonesian Marriage Law initially provides that prenuptial agreement can only be made ‘before or on the date of marriage’. This article was revised by Constitutional Court through its verdict Putusan Mahkamah Konstitusi Nomor 69/PUU-XIII/2015 Tahun 2015 which basically allow prenuptial agreement is made ‘during the marriage period’. It is also known as a Postnuptial Agreement.
This verdict has significant impact on the land ownership held by Indonesian who has married with foreigner, while she has not entered into a prenuptial agreement. It improves protection of land ownership of Indonesian land owner as mandated by Indonesian Agrarian Basic Law that adhere to the principle of ‘prohibition on land exile (gronds verponding verbood)’. It means that any land in Indonesian territory is prohibited to be possessed by non-Indonesian nationals.
In the event of any Indonesian loss his nationality due to marriage, inheritance or any other way, thus he should transfer his land ownership to any other third party, otherwise it will be taken over by the Indonesian government. Therefore, prenuptial agreement plays important role for different nationality spouse to secure and manage their immovable assets in Indonesia.
Besides the foregoing, there are actually some other benefits of entering into a prenuptial or postnuptial agreement such as controlling consumptive behavior of spouse to stabilize family’s financial life. Also, anticipating bad intention to acquire separate property after a divorce should be carefully considered, particularly for transnational marriage.
If one of the spouses is responsible for the debt, it shall only affect his/her assets, instead of marital property. Having the agreement in place, female spouse is allowed to establish a limited liability company and make cooperation with her husband because both spouses are not considered as an affiliated parties and no joint assets and interests.
