Share is a proof that shareholders have conducted a full deposit of capital in Limited Liability Companies (“Company”). Shares in Company are classified based on similar characteristics, it is called classification of shares. Article 53 paragraph (1) of Law Number 40 of 2007 on Limited Liability Companies (“Company Law”) states that the Articles of Association (“AOA”) specifies more than one class of shares.
Based on Article 53 paragraph (3) of Company Law, every share in the same class gives the holder the same rights. If there is more than one classification of shares, then AOA sets one of them as common shares. Common shares are shares which have voting rights to adopt resolutions in General Meeting of Shareholder (“GMS”) concerning all matters related to management of Company, have rights to receive dividends which are distributed and to receive remaining assets as a result of liquidation
Voting right which are possessed by holders of common shares may also be possessed by holder of other classes of shares.
Classifications of Shares
Classification of shares as referred in Article 53 paragraph (3) of Company Law, are:
a. Shares with voting rights and without voting rights;
b. Shares with special rights to nominate members of Board of Directors and/or members of Board of Commissioners;
c. Shares which after a certain period of time may be drawn back of exchanged with other classes of shares;
d. Shares which give right to holders to receive dividends prior to the holders of other share classification in distributions of cumulative dividends or non-cumulative dividends;
e. Shares which give right to holders to firstly receive distribution of remaining assets of Company upon liquidation prior to holders of other share classifications.
Various shares classifications do not always indicate that those classifications are independent and separate from one another, but may also constitute combination of two classifications or more.
Sofie Widyana P.