No. Key Changes MOLHR 2014 MOLHR 2016 How Does this Affect You 1. Validation of Legal Entities
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1 CLIENT UPDATE: PROCEDURES FOR VALIDATING LEGAL ENTITIES (PENGESAHAN BADAN HUKUM) AND AMENDING THEIR ARTICLES OF ASSOCIATION FEBRUARY 2016 Background On 25 January 2016, the Minister of Law and Human Rights ( MOLHR ) issued Regulation No. 1 of 2016 regarding the Amendment of MOLHR Regulation No. 4 of 2014 ( MOLHR Reg 4/2014 ) on the Procedures f Submitting Applications f the Validation of Legal Entities and Approval and Notification f the Amendments and Changes to the Articles of Association ( AOA ) and Data of a Limited Liability Company ( MOLHR Reg 1/2016 ). This new regulation has taken effect since 25 January Key Highlights This note is intended to give an overview only on the key changes in MOLHR Reg 1/2016. Basically, MOLHR Reg 1/2016 requires me suppting documents to be submitted to the MOLHR f the validation of legal entities, amendments changes to the AOA and Data. Below is the comparison between MOLHR Reg 4/2014 and MOLHR Reg 1/2016. No. Key Changes MOLHR 2014 MOLHR 2016 How Does this Affect You 1. Validation of Legal Entities Article 13 Pursuant to MOLHR 2014, the validation of legal entities require the following documents documented later by the Notary: a. Minutes of deed of establishment deed of amendment; Article 13 Any applicant submitting the request f legal entity s validation, is required to upload the deed of establishment along with the following suppting documents: a. Minutes of deed of establishment deed of amendment; The additional required document is to ensure that the new company will apply f NPWP and pay its annual tax obligations. Page 1 Client Update
2 b. Minutes of deed of consolidation/amalgamation if the company is established as a result of consolidation/amalgamation ; c. Evidence of capital injection, as follows: b. Minutes of deed of consolidation/amalgamation if the company is established as a result of consolidation/amalgamation; c. Evidence of capital injection as follows: 1. A copy of bank statement on the capital injection on behalf of the company iginal statement letter signed by the Board of Directs ( BOD ), Board of Commissioners ( BOC ) and shareholders if the capital injection is made in cash; 2. Original statement letter from the nonaffiliated appraiser, the receipt of purchase of goods if the capital injection is in the fm other than money, and if the injection is in the fm of immoveable assets; 1. A copy of bank statement on the capital injection on behalf of the company, iginal statement letter signed by the BOD, BOC, and shareholders if the capital injection is made in cash; 2. Original statement letter from the non-affiliated appraiser, the receipt of purchase of goods if the capital injection is in the fm other than money, and if the injection is in the fm of immoveable assets; Page 2 Client Update
3 3. A copy of Government Regulation and/ Minister of Finance Decree f a Stateowned Enterprise Regional Regulation in the event that the shareholder is a Regional Enterprise Province/Regency/City Government; 4. A copy of the balance sheet of a consolidated company the balance sheet of a non-legal entity company included as capital injection. d. Statement letter from the shareholders on the company s commitment to obtain the required decree, approval, recommendation from the technical institution f a company with certain business activities ( the copy of such document if it has been obtained); and e. Statement letter on the company s full address from the building management the authized institution, 3. A copy of Government Regulation and/ Minister of Finance Decree f a Stateowned Enterprise, Regional Regulation in the event that the shareholder is a Regional Enterprise Province/Regency/City Government; 4. A copy of the balance sheet of consolidated company, the balance sheet of nonlegal entity company included as capital injection. d. Statement letter from the shareholders on the company s commitment to obtain the required decree, approval, recommendation from the technical institutions f a company with certain business activities ( a copy of such document if it has been obtained); e. Statement letter from the shareholders on the company s commitment to secure Tax Payer Identification Page 3 Client Update
4 2. Notification to MOLHR on the Change of Company AOA iginal statement letter signed by the BOD, BOC, and shareholders regarding the company s full address. Article 25 This article is in relation to the changes to the AOA which do not need an approval from but only need to be notified to the MOLHR. To obtain the receipt of such notification, the company must submit the following documents: a. Amendment deed drawn up befe a Notary; b. Minutes of General Meeting of Shareholders ( GMS ) circular shareholders resolution; c. Deed of merger, consolidation, separation/spin-off, which attach: Number (Nom Pokok Wajib Pajak NPWP ); and the receipt on annual tax return rept; and f. Statement letter on the company s full address from the building management authized institution, iginal statement letter signed by the BOD, BOC, and shareholders regarding the company s full address. Article 25 This article is in relation to the changes to the AOA which do not need approval from but only need to be notified to the MOLHR. In der to obtain the receipt of such notification, the company must submit the following documents: a. Amendment deed drawn up befe a Notary; b. Minutes of GMS circular shareholders resolution; c. Deed of merger, consolidation, separation/spin-off, which attach: The additional required documents are to monit the company s compliance to its financial/tax obligations. With these changes, the company would need to ensure that it submits its annual tax return befe changing the AOA. Page 4 Client Update
5 Approval deed on the separation/spin-off of the company; A copy of financial statements of the last three years of each company conducting the merger, consolidation, separation/spin-off; and Evidence of one regarding the plan of separation/spin-off. d. A copy of NPWP, the iginal of which is known by the Notary; e. Evidence of payment in the Supplement of State Gazette of the Republic Indonesia; Approval deed on the separation/spin-off of the company; A copy of the financial statements of the last three years of each company conducting the merger, consolidation, separation/spin-off; and Evidence of one regarding the plan of separation/spin-off. d. Evidence of payment in the Supplement of State Gazette of the Republic Indonesia; e. Evidence of capital injection from the bank on behalf of the company, the balance sheet of the relevant financial year, any other evidence of injection, in the event of the change in the AOA regarding the company s capital increase; and Page 5 Client Update
6 3. Notification to MOLHR on the Change of Company Data f. Evidence of capital injection from the bank on behalf of the company, the balance sheet of the relevant financial year, any other evidence of injection, in the event of the change in the AOA regarding the company s capital increase; and g. A copy of suppting document from the relevant authity pursuant to the applicable laws and regulations, the iginal of which is known by the Notary. Article 28 This article is in relation to the change of the company s data (e.g. change of shareholders composition; name and structure of the company s shareholders; name and structure of the BOD and/ BOC; company s address) that do not change the AOA) which require the company to submit the following documents: f. A copy of suppting document from the relevant authity pursuant to the applicable laws and regulations, the iginal of which is known by the Notary; g. A copy of the company s balance sheet, and profit and loss rept f the relevant financial year (this applies f the companies which must be audited); and h. A copy of the company s NPWP and receipt on the annual tax return rept (as relevant). Article 28 This article is in relation to the change of the company s data (e.g. change of shareholders composition; name and structure of the company s shareholders; name and structure of the BOD and/ BOC; company s address) that do not change the AOA which require the company to submit the following documents: Please see our comments above. Page 6 Client Update
7 a. Deeds on the change of company s shareholders due to the transfer of shares change of shares ownership (e.g. deed on the change of shareholders that includes the name and owned shares amount, and/ deed of transfer of shares based on the applicable laws and regulations); b. Deed on the change of shareholder s name because the shareholders change their name (e.g. GMS Deed shareholders resolution with regards to the change of name; and the approval from relevant institution regarding the change of shareholder s name); c. The GMS deed shareholders resolution regarding the change of BOD and/ BOC compositions; d. Statement letter on the company s full address from the building management authized institution, iginal statement letter signed by the BOD, BOC, and shareholders regarding the company s full address; a. Deeds on the change of company s shareholders due to the transfer of shares change of shares ownership (e.g. deed on the change of shareholders that includes the name and owned shares amount, and/ deed of transfer of shares based on the applicable laws and regulations); b. Deed on the change of shareholder s name because the shareholder changes their name (e.g. GMS Deed shareholders resolution with regards to the change of name; and approval from the relevant institution regarding the change of shareholder s name); c. The GMS deed shareholders resolution regarding the change of BOD and/ BOC compositions; d. Statement letter on the company s full address from the building management authized institution iginal statement letter signed by the BOD, BOC, and shareholders regarding the company s full address; Page 7 Client Update
8 e. Merger that excludes the change of AOA: A copy of deed of company s merger; Deed of GMS shareholders resolution; A copy of financial statements of the last three years of each merging company; and One regarding the merger plan f. Company s dissolution, as follows: Deed of GMS, shareholders resolution, any other document that approves the company s dissolution, and evidence of if the dissolution is a result of GMS the end of the company s lifespan; Deed on the liquidat s statement regarding the dissolution of company based on the court s decision, along with a copy of such court s decision; e. Merger that excludes the change of AOA: A copy of deed of the company s merger; Deed of GMS shareholders resolution; A copy of financial statements of the last three years of each merging company; and One regarding the merger plan. f. Company s dissolution, as follows: Deed of GMS, shareholders resolution any other document that approves the company s dissolution, and evidence of if the dissolution is a result of GMS the end of the company s lifespan; Deed on the liquidat s statement regarding the ending of company based on the court s decision, along with a copy of such court s decision; Page 8 Client Update
9 Deed on the liquidat s statement based on the commercial court s binding decision that the bankrupt estate is not sufficient to pay the bankruptcy costs; Deed on the curat s statement on the company s dissolution based on the commercial court s binding decision because the bankrupt estate is in insolvent condition; Deed on the BOD s statement regarding the company s dissolution because of the revocation of the company s business license. g. The company s dissolution, as follows: Notification letter from the liquidat curat regarding the end result of liquidation, the regarding the repayment and liberation, and the deed Deed on the liquidat s statement based on the commercial court s binding decision that the bankrupt estate is not sufficient to pay the bankruptcy costs; Deed on the curat s statement on the company s dissolution based on the commercial court s binding decision because the bankrupt estate is in insolvent condition; Deed on the BOD s statement regarding the company s dissolution because of the revocation of the company s business license. g. The company s dissolution, as follows: Notification letter from the liquidat curat regarding the end result of liquidation, the regarding the repayment and liberation, and the deed Page 9 Client Update
10 on the liquidation result known by the Notary; and Newspaper regarding the result of separation. on the liquidation result known by the Notary; and Newspaper regarding the result of separation. h. A copy of the company s balance sheet, and profit and loss rept f the relevant financial year (this applies to the companies that must be audited); and i. A copy of company s NPWP and the receipt of an annual tax notification letter (this provision does not apply to the companies that amend the AOA within less than a year after obtaining the NPWP). Contact This Client Update is intended to give an overview only on the key changes in MOLHR Reg 1/2016 compared to MOLHR Reg 4/2014. There could be other changes that need to be considered on a case-by-case basis. Please do not hesitate to contact us if you need a me detailed advice, have specific questions. Page 10 Client Update
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