Thursday, 24 July 2008

Implications of the New Company Law - theme of European Joint Luncheon

On 17 April 2008, a European Joint Luncheon was organized by Ekonid at Intercontinental Midplaza Hotel with theme the Implication of the New Company Law. The speaker was Mrs. Kartini Muljadi, S.H., Senior Partner of Kartini Muljadi and Rekan. Basically, she only summarized what's new in New Company Law (Law No. 40 of 2007) which came into effect on 16 August 2007.
In this luncheon, she reminded that all Indonesian limited liability companies that obtained status as a legal entity before 16 August 2007 are required to adjust their Articles of Association to the terms of New Company Law prior to 16 August 2008. The sanction for any company that does not comply with said requirement may be dissolved by virtue of a decision of any Court of First Instance at the request of a public prosecutor or any interested party.Further, she also stated that New Company Law emphasized about personal liability of the Board of Directors ("BOD") of the Company. BOD should execute the management of the Company in good faith and full responsibility. Because there is an obligation to prove that the BOD cannot be held liable for the company's loss. Failing which, the BOD should be fully responsible for the company's loss and the shareholders can file lawsuit before the District Court against the BOD with regard to the company's loss due to the BOD's fault or negligence.

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