The General Meeting of Shareholders (GMS) is the highest organ in a Limited Liability Company (PT) and a forum for making important decisions relating to the running of the company. The GMS has authority that the Directors and Commissioners do not have in accordance with the Limited Liability Company Law Number 40 of 2007 (UUPT) and the Articles of Association of PT.
GMS Type
Based on Article 78 of Law Number 40 of 2007, there are two types of GMS; Annual GMS and Other GMS, with the following explanation:
- Annual GMS
Annual GMS is a GMS that must be held by companies no later than six months after the end of the financial year. Companies with a financial year of December 31, are required to hold an Annual GMS on June 30 each year. In the Annual General Meeting of Shareholders, there is a mandatory agenda including the accountability report of the Board of Directors, the Board of Commissioner’s supervisory report, ratification of financial reports, determination of the use of the Company’s net profit, and replacement of the Board of Directors and Commissioners if there is a change.
- Other GMS
This other GMS is usually referred to as the Extraordinary General Meeting of Shareholders (EGMS-LB) which can be held outside the Annual GMS schedule depending on the needs of the Company.
GMS Authority
The GMS has powers that are not granted to the Board of Directors or the Board of Commissioners within the limits specified in the Law and/or the Company’s articles of association. The GMS is held by the Company to decide matters that require decisions from the Shareholders. The following are some of the agendas that can be decided at the GMS:
- Changing the Articles of Association
- Approval of the annual report of the Board of Directors, Report on the supervisory duties of the Board of Commissioners, and granting of acquittal (acquit at decharge) to the Board of Directors and Commissioners
- Determination of the use of the Company’s profits
- Approval of the determination of salary and honorarium and other benefits for members of the Board of Directors and Commissioners of the Company
- Approval for the appointment of a Public Accounting Firm (KAP) to conduct an audit of the Company’s Financial Statements
- Changes in the composition of the members of the Board of Directors and/or the Board of Commissioners of the Company
In the GMS, shareholders are entitled to obtain information relating to the Company through the accountability reports of the directors and the board of commissioners. Shareholders are also allowed to submit questions and suggestions regarding the running of the Company.
Procedures for Holding a GMS
GMS is an important agenda that has stages of implementation that have been regulated in UUPT and the Company’s Articles of Association. For Public Companies whose shares are listed on the Stock Exchange, there are additional rules from the Exchange and the Financial Services Authority (OJK).
The following step is the procedures for holding a GMS for a Public Company:
- Proposals for requests to convene GMS may come from:
- Shareholders of 1 (one) or more who jointly represent 1/10 or more of the total shares submitted to the Board of Directors.
- Board of Commissioners.
- Notification of GMS Agenda, Submission of agenda items to OJK no later than 5 (five) Business Days prior to the announcement of the GMS.
- Announcement of GMS
- Announcement of GMS to shareholders no later than 14 days before the invitation.
- Information on the announcement of the GMS contains the provisions on which shareholders are entitled to attend and propose the agenda for the meeting, the date of holding, and summons for the GMS.
- Media announcements through daily newspapers, websites of Stock Exchanges, and Companies. Summons for the GMS
- Summons for the GMS to shareholders no later than 21 days prior to the GMS.
- Information on summons for the GMS: date, time, and place of the GMS, provisions for shareholders who are entitled to attend, agenda items including an explanation of each agenda item.
- Media calling for the GMS through daily newspapers, the website of the Stock Exchange, and the Company.
Place of Execution
Based on Article 76 of UUPT:
- The GMS is held at the domicile of the Company or where the Company conducts its main business activities as specified in the articles of association.
- Public Company GMS can be held at the domicile of the stock exchange where the Company’s shares are listed.
- The place of the GMS as referred to in paragraph (1) and paragraph (2) must be located in the territory of the Republic of Indonesia.
- If the GMS is present and/or represented by all shareholders and all shareholders agree to hold a GMS with a specific agenda, the GMS can be held anywhere with due observance of the provisions referred to in paragraph (3).
- The GMS as referred to in paragraph (4) can make decisions if the decision is unanimously approved.
GMS can also be held through teleconferences, video conferences, or other electronic media facilities that allow all GMS participants to see and hear each other directly and participate in the meeting. However, it should be noted that every GMS held using this method is required to make minutes of the meeting which are approved and signed by all GMS participants.
For information, two Asiavesta investees, companies with IDEA and NAYZ stock codes, held an AGMS on 22 May 2023 at Amana Venue, Jagakarsa. That is the information about the General Meeting of Shareholders, its objectives and types. Hopefully, this information is useful and can help you get to know more the general meeting of shareholders.
(Abstracted by: Lavy El Harisy)