Yes, if the company supports hybrid/online formats in compliance with regulations.
In Indonesia’s corporate landscape, the General Meeting of Shareholders (GMS) is far more than a routine gathering—it’s a platform where the future of a company is shaped. It’s where shareholders speak, vote, and ensure that the company’s leadership remains accountable. Whether you’re a local entrepreneur, foreign investor, or company executive, understanding how to properly conduct a GMS in Indonesia is a legal necessity and a strategic advantage.
A GMS is the supreme organ within a company under Indonesian law. It enables shareholders to exercise their highest rights—such as appointing or dismissing directors, approving financial statements, or deciding major transactions. Essentially, the GMS serves as a democratic check within corporate governance, giving power back to the owners of the company: the shareholders. Without it, companies risk decisions being made without oversight, potentially leading to internal conflict or even legal disputes.
There are two main types of GMS:
Understanding the distinction is vital, as each has different procedural rules and legal consequences.
The primary legal foundation is Law No. 40 of 2007 on Limited Liability Companies (UU PT). This law meticulously sets out how a GMS must be organized, who can convene it, what constitutes quorum, and how decisions are validly made. Notably, if any GMS is held without meeting the criteria under this law, its decisions can be nullified—a risk no business should take lightly.
The Articles of Association (Anggaran Dasar) complement the UU PT by tailoring procedures to each company’s context. They may outline specifics like the method of summoning shareholders or voting mechanisms. However, they must not conflict with the UU PT. Hence, legal review of your AoA before holding a GMS is highly recommended.
Only shareholders listed in the official shareholder registry have the right to attend a GMS. The law sets different quorum thresholds:
If the quorum isn’t met, the company must postpone the meeting and reconvene it with adjusted quorum rules, which prolongs the decision-making process—something they can avoid through early planning.
At least 14 days before the GMS (excluding the invitation and meeting date), the Board must send a formal invitation to all eligible shareholders. This notice must include:
For public companies, additional requirements from OJK Regulation No. 15/POJK.04/2020 apply, such as announcements via IDX and national newspapers.
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By default, companies must hold the GMS within Indonesia. They generally conduct it in Bahasa Indonesia, but in practice, they increasingly use bilingual proceedings and documents (Indonesian-English), especially when foreign investors are involved. It’s also important that the meeting is accessible—whether physically or via virtual platforms.
Voting can be done in several ways—by hand-raising, ballots, or electronically. The method should align with the AoA. Each shareholder’s vote is proportional to their shareholding. The company must clearly document the result of each vote and sign it in the minutes, which a Notary must then legalize if the meeting involves significant decisions.
Indonesian law ensures that all shareholders, regardless of the number of shares they hold, have the right to:
This fosters transparency and inclusion, essential values in today’s corporate governance.
Even minority shareholders holding at least 10% of shares have the power to request an Extraordinary GMS. They also have the right to contest decisions through the courts if they believe those decisions harm their interests. These protections are essential in preventing domination by majority shareholders and in building investor trust.
Typically, the Board of Directors takes the initiative to convene a GMS. However, in certain situations, the Board of Commissioners or shareholders holding at least 10% of voting shares may also request a GMS—especially when they consider the directors inactive or unresponsive.
Shareholders hold the directors and commissioners accountable during the GMS. During the Annual GMS, the board must present the financial statements, disclose major activities, and seek shareholder approval (known as “acquit et de charge”) for their actions in the previous year.
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One of the most common mistakes companies make is failing to meet the legal requirements—be it an incorrect quorum, vague invitations, or rushed decision-making. This can lead to the GMS being legally invalid, which not only wastes time and resources but could also expose the company to litigation.
Improperly handled GMS often spark corporate conflicts—especially when shareholders feel sidelined or when decisions are rushed without consultation. To prevent this, legal counsel must review all materials, and a neutral Notary must facilitate the meeting.
The COVID-19 pandemic brought new norms. The Ministry of Law and Human Rights has legally permitted digital or hybrid GMS in Indonesia through Regulation No. 21 of 2021. However, compliance with cybersecurity, confidentiality, and electronic voting requirements is crucial. Companies must use secure platforms that support digital attendance, real-time voting, and proper recording.
At Kusuma & Partners Law Firm, we have represented both private and public companies in ensuring the success of their General Meeting of Shareholders (GMS) in Indonesia. From drafting bilingual invitations to supervising online voting platforms, we emphasize meticulous compliance and shareholder transparency. Our team also handles shareholder disputes, hybrid GMS implementation, and legal audits of corporate resolutions to prevent future complications.
We believe a well-executed GMS not only builds shareholder confidence but also safeguards long-term business continuity.
Conducting a General Meeting of Shareholders (GMS) in Indonesia is not just a legal formality—it’s a cornerstone of good governance, transparency, and investor trust. Whether it’s routine corporate housekeeping or critical strategic decision-making, the GMS must be managed with care, structure, and legal precision. For companies looking to grow, attract investors, and ensure accountability, mastering the GMS process is indispensable.
Need help organizing your GMS or navigating shareholder rights and corporate compliance in Indonesia? Reach out to Kusuma & Partners Law Firm. Let’s make your next GMS legally secure and strategically impactful.
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“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”
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