Board Resolution For Sale Of Shares Of Subsidiary Company Template for Indonesia

When you need to sell shares in a subsidiary company in Indonesia, you must obtain formal board authorization through a properly executed board resolution. This document serves as the official corporate approval mechanism required under Indonesian Law No. 40 of 2007 on Limited Liability Companies, ensuring that your share divestment complies with both corporate governance standards and regulatory requirements.

When do you need this document?

You need this resolution whenever your company plans to divest ownership interests in a subsidiary, whether through partial or complete share sales. This includes strategic divestments for business restructuring, asset monetization to improve cash flow, compliance with foreign ownership regulations, or meeting regulatory requirements in specific sectors. The document is also required when responding to unsolicited acquisition offers, implementing court-ordered asset disposals, or transferring shares to joint venture partners. Additionally, if your subsidiary operates in regulated industries such as banking, telecommunications, or natural resources, you may need this resolution to comply with sector-specific ownership rules.

Key legal considerations

Your board resolution must demonstrate proper corporate authority and procedural compliance. The document should establish valid quorum according to your Articles of Association, provide detailed transaction rationale, and specify the terms of the proposed sale including purchase price and completion conditions. You must address any pre-emptive rights of existing shareholders and ensure compliance with affiliated transaction regulations under OJK Regulation No. 42/POJK.04/2020. The resolution should also authorize specific individuals to execute the transaction documents and represent the company in regulatory filings. Consider including provisions for due diligence cooperation, warranty limitations, and post-completion obligations to protect your company's interests.

Legal requirements in Indonesia

Indonesian law imposes specific procedural and substantive requirements for subsidiary share sales. Under Law No. 40 of 2007, you must ensure proper board meeting procedures, including adequate notice periods and accurate minute-keeping. Government Regulation No. 27 of 1998 requires compliance with merger and acquisition procedures for significant transactions. If foreign investment is involved, you must satisfy Law No. 25 of 2007 requirements and obtain necessary approvals from BKPM under Regulation No. 4 of 2021. The Ministry of Law and Human Rights must be notified of ownership changes, and you may need to update your company's legal standing certificate. For publicly listed companies or regulated sectors, additional approvals from relevant authorities may be required before completing the share transfer.