Term of Office of Directors and Commissioners in the Company – One of the most important parts in establishing a company (PT) is the presence of board members, both directors and commissioners. The Board of Directors is the one who has full authority and responsibility for managing the company for the interests of the company, in accordance with the aims and objectives of the company and represents the company, both inside and outside the court in accordance with the provisions of the articles of association. Meanwhile, the Commissioner is tasked with providing recommendations, advice, supervision and input to the Director regarding the running of the company.

In connection with the importance of members of the Board of Directors and Commissioners in a company, it is necessary to know whether there is a term of office for board members, both directors and commissioners, in carrying out their duties in the company.

Below we will discuss it!

Term of office for members of the Board of Directors & Commissioners

Regarding the term of office of members of the board of directors and board of commissioners in the Law – PT, No. 40 of 2007, there is not a single article that expressly, specifically stipulates that the positions of directors and commissioners have a term. The term of office of members of the board of directors and board of commissioners is adjusted to the needs of the company.

However, someone who is appointed as a member of the board of directors and board of commissioners must be appointed for a certain period of time and can be reappointed afterwards, in Article 94 Paragraph 3 and Article 111 Paragraph 3, Law – PT, No. 40 of 2007.

In Law No. 40 of 2007 explains the requirements for appointing members of the board of directors and board of commissioners for a “certain period of time”, intended so that members of the board of directors and board of commissioners whose terms of office have ended do not automatically continue their original positions, except by re-appointment based on a GMS decision.

For example, for a period of 3 years or 5 years.

Requirements to become a member of the Board of Directors and Board of Commissioners in a company (PT)

Those who can be appointed as members of the Board of Directors are individuals who are capable of carrying out legal actions, unless within 5 (five) years prior to their appointment:

1. Declared bankrupt;
2. Being a member of the Board of Directors or a member of the Board of Commissioners who is found guilty of causing a company to be declared bankrupt; or
3. Convicted of committing criminal acts that are detrimental to state finances and/or related to the financial sector.

Reappointment of members of the Board of Directors and Board of Commissioners

1. The company sends a summons to the GMS including the agenda for the reappointment of the company’s directors and commissioners.
2. The results of the decision will be valid if approved by at least 2/3 of the total number of votes cast.
3. The decision to reappoint immediately takes effect according to the date agreed at the GMS. If no date is stated, the decision takes effect immediately after the meeting is over.
4. The company makes a deed of amendment and sends notification to the Minister of Law and Human Rights regarding the reappointment of directors and commissioners within 30 days at the latest.
5. If after this time period there is no notification of the deed of change to the minister, then the appointment is legally null and void.
6. All decisions and actions taken by the elected directors and commissioners before they are canceled are considered to remain valid. However, the actions and decisions taken by the directors and commissioners after they are canceled are invalid and do not bind the company
7. Cancellations must be announced in the newspaper no later than 7 days after the cancellation.

Closing

Based on the Limited Liability Company Law Number 40 of 2007, the term of office of members of the board of directors and board of commissioners is adjusted to the needs of the company.

In general, the term of office is 3 – 5 years. After the term of office ends, a GMS must be held to reappoint/dismiss/replace members of the board of directors.

Confused about the board of directors’ GMS process? Let’s contact us now!

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