Board Resolution For Issue Of Shares Template for Indonesia

When your Indonesian company needs to raise capital through issuing new shares, you must first obtain formal board approval through a Board Resolution For Issue Of Shares. This document serves as the legal foundation for any share capital increase and ensures compliance with Indonesian corporate law requirements.

When do you need this document?

You need a board resolution whenever your company plans to issue new shares, whether for raising working capital, funding expansion projects, or bringing in new investors. This includes situations where you're converting debt to equity, implementing employee stock option plans, or preparing for initial public offerings. Foreign investment companies must also use this resolution when adjusting shareholding structures to comply with negative investment list restrictions. Public companies require board resolutions before any rights offerings or private placements, while private companies need them for capital injections from existing or new shareholders.

Key legal considerations

Your board resolution must demonstrate that directors have carefully considered the share issuance terms, including the number of shares, issue price, and payment methods. The resolution should address pre-emptive rights of existing shareholders and confirm that the issuance serves legitimate business purposes. You must ensure the resolution includes proper authorization for management to execute all necessary documentation and complete regulatory filings. The document should reference compliance with the company's articles of association and confirm that the board has adequate authority under company bylaws. For foreign investment companies, the resolution must address sectoral ownership restrictions and BKPM compliance requirements.

Legal requirements in Indonesia

Under Law No. 40 of 2007 on Limited Liability Companies, your board resolution must be passed at a properly convened meeting with required quorum present. The resolution must be recorded in official meeting minutes and signed by the meeting chairperson and secretary. You must submit the resolution along with amended articles of association to the Ministry of Law and Human Rights within 30 days of approval. Public companies must also comply with OJK Regulation No. 32/POJK.04/2015 regarding capital increases and may need OJK approval before implementation. Foreign investment companies require BKPM notification and must ensure compliance with sectoral ownership limits under Law No. 25 of 2007 on Investment. Listed companies must additionally follow stock exchange disclosure requirements and may need shareholder meeting approval for significant issuances.