Picture Source: canva.com
Based on Article 1 number 1 of Law Number 40 of 2007 concerning Limited Liability Companies (“Company Law”), which states:
“A Limited Liability Company, hereinafter referred to as the Company, is a legal entity that is a capital alliance, established based on an agreement, conducts business activities with total basic capital divided into shares and meets the requirements stipulated in this law and its implementing regulations.”
Referring to the provision, the establishment of the Company is based on the agreement of the founders, which imposes an obligation on the founders to deposit the basic capital in accordance with the agreed amount.
The deposit of the basic capital must be deposited into the Company’s account and evidenced by valid proof of deposit. Based on Article 6 paragraph (1) letter e of the Regulation of the Minister of Law and Human Rights Number 21 of 2021 concerning Requirements and Procedures for the Registration of Establishment, Amendment, and Dissolution of Limited Liability Company Legal Entities, the evidence of the company’s capital deposit is in the form of:
- A copy of the deposit slip or a copy of a bank statement in the name of the Company or a joint account in the names of the founders, or an original statement confirming the deposit of the company’s capital signed by all members of the board of directors together with all founders and all members of the company’s board of commissioners, if the capital deposit is in the form of money;
- Original assessment certificates from independent experts or proof of purchase of goods if the capital deposit is in forms other than money accompanied by an announcement in a newspaper, if the deposit is in the form of non-moveable assets;
- Photocopies of government regulations and/or ministerial decisions for state-owned companies or regional regulations in cases where the founders are regional companies or regional governments of provinces/districts/cities;
- Copies of the balance sheet of the merging company or the balance sheet of a non-legal entity company that is included as a capital deposit.
If Shareholders Fail to Fully Deposit Capital Shareholders who fail to fully deposit capital mean they do not fulfil the requirements as shareholders regulated in the Company Law. This results in the inability to fulfil the rights of shareholders as regulated in Article 52 paragraph (1) of the Company Law, which states:
“Shares entitle their owners to:
- Attend and vote at GMS;
- Receive dividend payments and the remainder of wealth from liquidation;
- Exercise other rights according to this law.”
Thus, shareholders who do not fully deposit their capital cannot exercise their rights as shareholders, including voting at GMS and receiving dividends.
Shareholders whose names are listed in the company’s articles of association but have not fully deposited their capital, then the legal status of the company’s establishment becomes legally defective.
Lawsuit of Breach of Contract or Unlawful Acts against Shareholders who Fail to Fully Deposit Capital
Shareholders who fail to fully deposit their capital can be categorized as committing a breach of contract (in this case, the company’s articles of association) materially and committing an Unlawful Act (“UA”) that violates the obligations of shareholders under Article 33 of the Company Law. For breach of contract claims, the requested claims can be:
- Cancellation of the agreement;
- Cancellation of the agreement with compensation claims;
- Contract fulfilment;
- Contract fulfilment with compensation claims;
- Compensation.
Then, in UA claims, the requested claims can be:
- Compensation for monetary losses;
- Compensation in kind or restoration to the previous condition;
- Statement that the act committed is unlawful;
- Prohibition from carrying out an act;
- Nullification of something done unlawfully;
- Announcement of Decision or of something that has been corrected.
However, it should be noted that breach of contract claims cannot be filed in one lawsuit with UA, this is in accordance with the Supreme Court Decision No. 1875 K/Pdt/1984 dated April 24, 1986, combined with Supreme Court Decision No. 879 K/Pdt/1997 dated January 29, 2001, which emphasizes that the merging of claims between breach of contract and UA in one lawsuit violates procedural regulations because they must be resolved separately.
If you need legal consultation about any legal case, you can contact us through:
Email: secretary@mnllaw.co.id
Call: +62 21-3905928