Board of Directors’ role in the Indonesian Limited Liability Company
Board of Directors' role in the Indonesian Limited Liability Company
board of directors

Article 92 Paragraph (1) Law No. 40 Year 2007 regarding Limited Liability Company (Company Law) states, Board of Directors will undertake the management of Company for the interest of the company and in accordance with the company’s purpose and objectives. Further, the Paragraph (2) states, Board of Directors have authority to undertake the management as meant under Paragraph (1) according with the policy that is regarded appropriate within the limits specified in this Act and/or articles of association.

Board of Directors also has representative role as governed under the Article 98 Company Law. That is, Board of Directors shall represents the Company either inside and outside the court as persona standi in judicio. Persona standi in judicio means, Board of Directors shall be entitled and authorized as a party to represent the Company in a case before the court.

In principle, this representative function is attached to each member of Board of Directors, except for the articles of association determines otherwise. In principle, also the power of this representative function is unlimited and unconditional. However, the Act, Articles of Association and Resolution of General Meeting of Shareholders (GMS) may determined otherwise.

In performing its role, Board of Directors is obligated to obey Company Law and the Articles of Association, which for the particular actions it must get approval from The Board of Commissioners and even GMS.

Board of Directors in each of its action must apply 2 (two) principle those are; First: duty of care which means the Board of Directors must give due attention to the Company that it manages so being able to make an appropriate decision or policy for the Company. Second; duty of loyalty which means, each actions taken by Board of Directors is for the interest of Company instead of the interest of Board of Directors. (this Article in Bahasa)

Legal Basis:

Law No. 40 Year 2007 Regarding Limited Liability Company

About The Author

Boris Tampubolon

Boris Tampubolon, S.H. is an Advocate and Legal Consultant. He is also the Founder of Law Firm Dalimunthe & Tampubolon Lawyers. He made this website with the aim to provide all information related of law, help and defend you in order to solve your legal problem.

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