In accordance with Article 1 number 2 and number 4 of Law Number 40 of 2007 concerning Limited Liability Companies (“Company Law”), the General Meeting of Shareholders (“GMS”) is one of the Company’s organs that has authority not granted to the Board of Directors or the Board of Commissioners within the limits specified in the Company Law. Furthermore, the Company Law stipulates that the annual GMS must be held within a period of no later than 6 (six) months after the end of the last fiscal year, so every year a Company must hold a GMS.
Each conduct of a GMS must have minutes of the meeting prepared, approved, and signed by all GMS participants. Regarding the minutes, they can be prepared by a Notary or not. If the minutes are prepared by a Notary, then the Notary must attend the GMS. Meanwhile, if the minutes are not prepared by a Notary, they can be prepared by a designated or authorized party by the Company, which is usually the Board of Directors.
Based on the above, the minutes of the GMS essentially constitute an agreement among the shareholders regarding certain matters agreed upon in the GMS. Thus, automatically, the minutes of the GMS must meet the provisions of Article 1320 of the Civil Code, namely:
- Agreement;
- Capacity;
- A certain subject matter;
- A lawful cause.
If it does not meet the subjective requirements in the form of agreement and capacity, then the minutes of the GMS can be invalidated. Furthermore, if it does not meet the objective requirements in the form of a certain subject matter and a lawful cause, then the minutes of the GMS are legally void.
Indeed, the Company Law does not explicitly regulate whether the minutes of the GMS can be cancelled or not. However, to assess the validity of the minutes of the GMS, it is necessary to consider the entire series of GMS arrangements to see if they comply with the legal provisions or not. The following are the mandatory requirements based on the applicable legal regulations:
- GMS Convocation
The GMS must be conducted with a notice sent out at least 14 (fourteen) days before the meeting without taking into account the date of the notice and the date of the GMS.
- Parties Entitled to Attend the GMS
Based on Article 52 of the Company Law, shareholders are the parties entitled to attend the GMS.
- Quorum Attendance in the GMS
The quorum attendance in the GMS is adjusted to the GMS agenda. For ordinary agenda items, the quorum required is more than ½ (one half) of the total shares with voting rights. If the GMS will discuss amendments to the Company’s Articles of Association, then the quorum required in the first GMS is at least 2/3 (two-thirds) of the total shares with voting rights. Then, for GMS agendas as mentioned in Article 89 paragraph (1) of the Company Law, it must meet a quorum of at least ¾ (three quarters) of the total shares with voting rights at the first GMS.
Procedure for Cancelling the Minutes of the GMS
- Through a Lawsuit to the District Court
The minutes of the GMS can be cancelled through a lawsuit for an unlawful act to the district court. This is based on the grounds that the notary or the party authorized to prepare the minutes of the GMS has made the minutes from an invalid GMS. The plaintiff in the lawsuit for an unlawful act can request the judge to cancel the related minutes of the GMS.
- Through Another GMS Decision
Another legal step that can be taken is to cancel the minutes of the GMS outside of court through a different GMS decision held after the previous GMS. Thus, another GMS to cancel the minutes from the previous GMS must ensure that it has met all applicable legal provisions and has been agreed upon by all shareholders.
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