Along with the business activities that are being carried out, several companies including Limited Liability Companies (PT) can also make changes to the articles of association. Usually, an amendment to the articles of association is required to expand the business of the PT.
Not only that, changes to the articles of association can also occur due to the need for additional capital, changes in shareholders, or simply a change of address because the office is no longer able to accommodate existing employees.
Yes, if the information changes, it means that KH Friend must make changes to the articles of association of the PT. This change in the articles of association must also be registered with the Ministry of Law and Human Rights. So, what are the things that need to be considered in order to change the articles of association of a PT? What are the requirements and procedures that must be done? Check out the discussion in the following article.
What are the Articles of Association of a PT or Company?
When KH Friend makes a company establishment deed, it must also contain the articles of association and other information related to the establishment of the PT. Yes, in principle, besides having to comply with Law No. 40 concerning PT, the company must also comply with the articles of association that have been determined. So it can be concluded that these articles of association are the rules of the game in a PT which must contain at least several things such as:
- Name and domicile of the company;
- Purpose and objectives and business activities of the company;
- Period of establishment of the company;
- The amount of authorized, issued, and paid-up capital;
- Number of shares, classification of shares if any and number of shares for each classification, rights attached to each share, and par value of each share;
- Name of position and number of members of the Board of Directors and Board of Commissioners;
- Determination of the venue and procedures for holding the GMS;
- Procedures for the appointment, replacement, dismissal of members of the Board of Directors and the Board of Commissioners;
- Procedures for utilization of profits and distribution of dividends.
In addition to the above points, the articles of association may also contain other provisions, but are not allowed to contain provisions on the receipt of fixed interest on shares and provisions on the provision of personal benefits to founders or other parties.
What points can be amended in the Articles of Association?
Basically, the provisions related to changes in the articles of association of PT are contained in Law No. 40 of 2007 concerning PT. Where KH Friend cannot make changes to the identity or information of PT unilaterally because it requires the role of notaries and the state, in this case the Ministry of Law and Human Rights. In addition to being made in a notarial deed, there are some changes in information that also require Ministerial approval, but there are also some changes that are sufficient with notification. The provisions for budget changes requiring approval from the Ministry of Law and Human Rights are related:
PT Name Change
If you want to change the name of your PT, you must change the articles of association and amend the company’s deed of establishment. Also, make sure that the name of the new PT that KH Friend will use has not been used by another company.
Change of Domicile of PT
Usually, when you establish a PT, the deed of establishment will list the municipality where the PT is established. So, if you want to move the office to a different address and region, KH Friend is required to make changes to the articles of association. And it should also be noted, when KH Friend wants to move the office to another building even though it is still in the same administrative area, then you still have the obligation to amend the articles of association of the PT.
Change of Purpose and Objectives of a PT
This change occurs when KH Friend wants to make changes to the type of business field that has been contained in the previous PT establishment deed. For example, your company initially conducted general trading, but as it develops, KH Friend wants to expand to the marketplace, it is necessary to make changes to the articles of association. This change is part of the business development strategy, so it can reduce or add to the list of business fields.
Amendment to the Period of Establishment of a PT
Article UUPT explains that a PT can be established for a limited or unlimited period of time. Where in a limited period of time means that there is a time limit for the establishment of a PT such as 5 or 20 years for a particular project. Meanwhile, a PT that is established with an unlimited period of time, then it does not have a time limit for its establishment. So that as long as the PT is still running, the license is still valid.
Changes in the Amount of Authorized Capital
In the middle of the business journey, if KH Friend wants to change the authorized capital that has been stated in the PT establishment deed, then you are required to make changes to the articles of association.
Reduction of Issued and Paid-up Capital
Not only when you want to increase the authorized capital, when KH Friend decides to reduce the issued capital or paid-up capital due to a consideration of business sustainability, then you are also required to make changes to the articles of association of PT.
Change of Status of Closed PT to Open or Vice Versa
A publicly listed PT is a PT or company that conducts a public offering of shares in the capital market. If Sobat KH establishes a PT and then plans to seek additional capital through the stock exchange, the company’s status will change to a public PT. This will automatically change when Sobat KH has conducted an IPO (initial public offering) on the stock exchange. If this happens, the company is also required to make changes to the articles of association of the PT. For the record, for changes in the period of time, KH Buddy must obtain the Minister’s approval of the application no later than 60 days before the end of the period of establishment of the PT. As for changes in capital and number of shareholders, KH Buddy must amend the articles of association of the PT within a maximum period of 30 days from the fulfillment of the criteria as a public PT in the capital market. Unlike the seven points above that require approval, for changes to other provisions such as the composition of the Board of Directors and / or Commissioners, KH Friend only needs to submit changes to the articles of association of the PT to the Minister.
What are the Requirements for Amending the Articles of Association of a PT?
Now, Friend KH has understood what provisions can be changed in the articles of association of a PT, including which ones require Ministerial approval and which do not. Now next, there are several administrative documents required to amend the articles of association of a PT, including:
- ID cards of company organs (shareholders, directors, commissioners)
- Deed of establishment of PT until the last amendment
- Certificate of domicile
- NPWP of company organs (shareholders, directors, commissioners)
- Description of changes in data of PT
- Other supporting documents related to the object of change
What is the Procedure for Amending the Articles of Association of a PT?
Referring to the PT Law, amendments to the articles of association must be stipulated at the General Meeting of Shareholders (GMS), in addition, the agenda regarding amendments to the articles of association must also be clearly stated in the GMS summons. The GMS to amend the articles of association must fulfill the quorum of attendance and approval in accordance with the provisions of Article 88 of the PT Law as follows:
- Attended by at least ⅔ of the total number of shares with voting rights or represented at the GMS
- A resolution to amend the articles of association shall be valid if approved by at least ⅔ of the total number of votes cast.
However, the above provisions can be excluded if the articles of association have determined the attendance quorum and/or provisions regarding the adoption of a larger GMS decision. Then, if the GMS does not reach the attendance quorum, a second GMS may be held. The provisions for the attendance quorum at the second GMS are as follows:
- Attended by at least ⅗ of the total number of shares with voting rights or represented at the GMS
- The resolution to amend the articles of association at this GMS shall be valid if approved by at least ⅔ of the total votes cast.
Just like the first GMS, this provision can be waived if the articles of association have determined the attendance quorum and/or provisions on the adoption of larger GMS resolutions. Furthermore, GMS resolutions related to amendments to the articles of association must be contained or stated in a notarial deed written in Indonesian. If the amendment to the articles of association has not been contained in a notarial deed of minutes of the meeting, it must be stated in a notarial deed no later than 30 days, starting from the date of the GMS resolution. After the notarial deed is made, Friend KH can make an application for amendments to the articles of association submitted online through the Legal Entity Administration System (SABH) owned by the Directorate General of General Legal Administration.
Factors Causing a PT’s Articles of Association Amendment to be Rejected
It should also be noted that in some circumstances, amendments to the articles of association may not be made, for example when a PT has been declared bankrupt. Not only that, requests for approval of amendments to the articles of association can also be rejected if:
- Contrary to the provisions regarding the terms and procedures for amending the articles of association
- The content of the amendment is contrary to the provisions of laws and regulations, public order, and/or decency
- There were objections from creditors to the GMS resolution on capital reduction
In addition, when Friend KH wants to change the name of the PT and change the composition of the board of directors at the same time, it must obtain a letter of approval from the Minister. So, the change in the composition of the board of directors is included in the Minister’s approval of the change in the name of the PT. After the approval letter from the Minister has been issued, the changes made are effective.
READ ALSO: Authorized Capital and Paid-up Capital in PT, What’s the Difference?
However, specifically for a closed PT to become a public PT, the amendment to the articles of association takes effect from the effective date of the registration statement submitted to the supervisory institution in the capital market sector for a public PT; or the time of the IPO.
KH Contact
This is a complete explanation of the requirements and procedures for amending the articles of association of PT. For KH Pals who also want to make changes to the articles of association, it is better to think carefully beforehand. Because as a legal implication of changing the budget, KH Friend is also required to change several other legalities. For example, when you change the domicile of the company, you also need to take care of changing the legality of SKDP, NPWP, SIUP, and TDP. Because all of these documents still use the old domicile. So, make sure you consult before making changes to the articles of association with Kontrak Hukum. Together with professional experts, you can consult anytime and anywhere for free. In addition, we can also help you to take care of the licenses or legalities needed for PT, ranging from deeds, NIB, NPWP, to business addresses. For more information, please visit our KH Services – Establishment page. If you have any other questions about company articles of association or other legal needs, just consult us at Ask KH or via direct message (DM) to Instagram @kontrakhukum.
