Circular Resolution Of Shareholders Template for Indonesia

A Circular Resolution of Shareholders is an essential corporate document that allows your Indonesian company to make important business decisions without holding a physical shareholder meeting. Under Law No. 40 of 2007 on Limited Liability Companies, this document provides a legally recognized method for obtaining unanimous shareholder consent on various corporate matters through written agreement rather than formal assembly.

When do you need this document?

You'll need a Circular Resolution of Shareholders when your company requires quick decision-making without the time and expense of organizing a general meeting. This document is commonly used for approving annual financial reports, appointing or removing directors and commissioners, authorizing significant business transactions, amending articles of association, or approving mergers and acquisitions. It's particularly valuable when shareholders are geographically dispersed, during urgent business situations, or when scheduling conflicts make physical meetings impractical. Foreign-invested companies often rely on circular resolutions to accommodate international shareholders who cannot easily attend meetings in Indonesia.

Key legal considerations

The most critical requirement is achieving unanimous consent from all shareholders, as partial agreement typically invalidates the resolution under Indonesian law. Your document must clearly identify all shareholders, specify their shareholding percentages, and detail the exact matter being resolved. The resolution should reference relevant provisions in your company's Articles of Association and cite appropriate sections of Law No. 40 of 2007. Certain corporate actions may be excluded from circular resolution procedures and require physical meetings, such as matters involving conflicts of interest or specific statutory requirements. You must ensure proper documentation and record-keeping, as these resolutions become part of your company's official corporate records and may be required for regulatory compliance or future audits.

Legal requirements in Indonesia

Indonesian law requires that circular resolutions comply with specific procedural and substantive requirements under Law No. 40 of 2007 and Government Regulation No. 7/2021. The document must include your company's complete legal name, registration number, and registered address, along with detailed shareholder information including names, addresses, and shareholding details. For publicly listed companies, additional requirements under POJK No. 15/POJK.04/2020 may apply regarding disclosure and timing. The resolution must be executed in Indonesian language or accompanied by certified translations if prepared in other languages. Depending on the nature of the resolved matter, you may need notarization under Law No. 30 of 2004 on Notary Position, particularly for matters affecting company structure or major transactions. Some corporate actions may also require registration with the Ministry of Law and Human Rights or other relevant authorities to be legally effective.