Terminating BOD & BOC in the Company – All members of the company can be involved in the impact of the company, having responsibility and commitment is one of the keys to success in pursuing a business and to respect each other in the company.

The policy commitment to respect all members of the company is an important step in the company’s journey to fulfill all responsibilities, which deserve to be fulfilled.

This signals internally and externally that the company understands what is expected, and takes its responsibilities seriously. The process of developing commitment can also be a good way to increase internal awareness and strengthen relationships with stakeholders within a company (BOD & BOC).

Below are the things that should be considered in the dismissal of the Board of Directors and Commissioners (BOD & BOC) in the Company.

General Meeting of Shareholders (“GMS”)

Board of Directors and Commissioners (BOD & BOC) can be dismissed at any time based on the decision of the GMS by stating clear reasons that the person concerned no longer meets the requirements as a member of the Board of Directors according to the Limited Liability Company Law, such as: 

1. Perform actions that are detrimental to the limited liability company (PT) or; 
2. For other reasons deemed appropriate by the GMS.

In addition, it is necessary to pay attention to the quorum of the GMS that must be met. Article 86 paragraph 1 of the Limited Liability Company Law stipulates that a GMS may be held if more than 1/2 of the total shareholders with voting rights are present or represented, unless a larger quorum is determined by law and/or the articles of association.

Then, the decision of the GMS is taken from deliberation for consensus ‘’Article 87 paragraph 1 of the PT Law’’. If the deliberation decision is not reached, then the decision of the GMS is still valid if it is approved by more than of the total votes cast (Article 87 paragraph 2 of the PT Law).

Therefore, it is necessary that at least more than 1/2 of the shares with voting rights are present at the GMS, and at least more than 1/2 of the shareholders present to approve the decision to dismiss the Board of Directors and Commissioners (BOD & BOC). 

Opportunity for Self Defense

Prior to the GMS/decision on the termination of Board of Directors and Commissioners (BOD & BOC), the person concerned, the Board of Directors and Commissioners (BOD & BOC) concerned shall be notified in advance of the planned dismissal and must be given the opportunity to present his/her self-defense (Article 105 paragraph 2 of PT Law). The defense is made in writing. The nature of this defense is itself, meaning it must be directly concerned.

After the self-defense has been submitted in the GMS forum, then the GMS can make a decision.

Notes: Giving an opportunity to defend oneself is not necessary if the person concerned does not object to the dismissal. ‘’Article 105 paragraph 4 of the Company Law’’.

Term of Termination

Dismissal of members of the Board of Directors and Commissioners (BOD & BOC) shall take effect as of:

1. Closing of the GMS;
2. The date of the circular resolution decision;
3. Other date determined in the resolution of the GMS; or
4. Other date specified in the circular resolution decision.

Conclusion

Dismissal of members of the Board of Directors and Commissioners (BOD & BOC) cannot be done easily. Many processes are needed and cannot be done in a short time.

In this case, the Board which acts as a supervisor is given the authority to temporarily dismiss members of the board of directors so that the interests of the company are not neglected during the dismissal period. This is in accordance with the points stated in Article 106 paragraphs 1 and 4 of the 2007 Limited Liability Company (PT) Law.

If you have difficulty in the process of termination Board of Directors and Commissioners (BOD & BOC). You can contact us ‘’Indoservice’’ regarding company establishment, GMS & company dissolution in Indonesia. 

Indoservice, a secretarial and company licensing legal consulting company that can assist you in the process of company establishment, GMS/Changes & dissolution of companies in Indonesia, management, change & revocation of company-related licenses. Trusted and experienced in Indonesia, committed to providing the best and fast service to meet your needs.

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