Companies’ authorized capital is divided into shares. Shares is a moveable goods which give rights to the owner to attend and to vote in the General Meeting of Shareholders (“GMS”), to receive the payment of dividends and the remaining asset as the result of liquidation, and also to perform other rights as set out under Law Number 40 of 2007 on Limited Liability Company (“Company Law”).
Under Article 56 of Company Law, it regulates that transfer of right of shares should be performed by a deed of transfer of right. Deed of transfer of right can be made before notary or with a privately drawn deed. The hardcopy of a deed of transfer of right and its copy should be delivered to the company. The Board of Directors is obliged to record the transfer of right of shares, the date and the day of the transfer of right of shares in the shareholders register or special register and inform about the changes of the composition of shareholders to the Minister to be recorded in the Company Register within the period of not later than 30 (thirty) days as from the date of transfer of rights.
In the Company’s article of association, the provision of transfer of rights can be regulated, such as:
1. mandatory to firstly offer to the shareholder with special qualification or other shareholders;
2. mandatory to obtain approval from company’s organ; and / or
3. mandatory to obtain approval from authorized institution in accordance with the law.
Provisions as regulated above are not applicable if the transfer of right of shares occurs by the law. Transfer of right of shares occurs by the law means transfer of shares as the result of inheritance, or transfer of shares as the result of merger, consolidation, or demerger. But for the transfer of shares as a result of inheritance, it should obtain approval from authorized institution in accordance with the law.
If the article of association obliges the shareholder who intends to sell the share to firstly offer their shares to the shareholder with special qualification or other shareholders, the offer to the shareholders with special qualification or other shareholder is performed within a period of 30 (thirty) days as from the offering date. If within the period of 30 (thirty) days as from the offering date the shareholders do not purchase the shares which are offered, then the shareholder who intends to sell their shares may offer and sell their shares to the third party. Shareholder, who intends to sell their shares but is obliged by the article of association to offer their share, has the rights to revoke the offer after the period of 30 (thirty) days is over.
The approval for transfer of right of shares by the company’s organ or its refusal should be given in writing with a period of not later than 90 (ninety) days as from the company’s organ receives the request for the approval of transfer of rights. If the period of 90 (ninety) days has passed and the company’s organ has not given a written statement, then the company’s organ is considered to approve the transfer of rights of shares.