The definition of GMS (General Meeting of Shareholders) according to Article 1 number 4 of Law No. 40 of 2007 concerning Limited Liability Companies (“Company Law”) is an organ of the company that has authority not given to the Board of Directors or Board of Commissioners within the limits specified in this Law and/or the articles of association.
Based on Article 86 paragraph (1) of the Company Law, GMS can be held if in the GMS more than 1/2 (one half) of the total shares with voting rights are present or represented, unless the Law and/or the articles of association specify a larger quorum, but if the quorum is not achieved in the GMS, a second GMS can be called. However, it should be noted that the first GMS must still be held but cannot start because the quorum is not reached.
According to Article 86 paragraph (4) of the Company Law, GMS can be held if at least 1/3 (one third) of the total shares with voting rights are present or represented, unless the articles of association specify a larger quorum.
But if the quorum is still not reached in the second GMS, based on Article 86 paragraph (5) of the Company Law, the Company can apply to the chairman of the district court whose jurisdiction includes the Company’s domicile upon the Company’s request to establish a quorum for the third GMS.
Therefore, if a company wants to hold a GMS but shareholders are unwilling to attend, the solution is for the company to file a petition with the Local District Court according to its legal domicile to request the determination of the quorum that can be fulfilled by the company.