ANNUAL REPORT OBLIGATION FOR COMPANIES IN INDONESIA

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Aside from annual tax filings and the annual financial reports, companies in Indonesia, including both local company and PMA Company, has the obligation to submit an Annual Report pursuant to the Indonesian Company Law. Learn more regarding what the obligation entails and how to do it.


Pursuant to Article 66 (1) of Law No. 40 of 2007 concerning Limited Liability Company (“Company Law”) the Board of Directors of a company has the obligation to submit an Annual Report to the General Meeting of Shareholders (“GMS”). The GMS where the submission itself is conducted is called the Annual General Meeting of Shareholders (“AGMS”).

CONTENTS OF ANNUAL REPORT
The Annual Report itself, pursuant to Article 66 (2) of Company Law, must consist at least of the following contents:

  1. The Financial Report of the Company for the closing Financial Year, which at least must include the following:
    1. The closing Balance Sheet of the closing Financial Year and the previous year;
    2. Statement of Profit and Loss;
    3. Cash Flow Report;
    4. Statement of changes in company Equity; and
    5. Notes to the Financial Report.
  2. A Report on the Company Activities in the closing Financial Year;
  3. A Report on the implementation of Corporate Social and Environmental Responsibility (CSR) by the Company;
  4. Details of problems arising during the Financial Year which have affected the Company business activities throughout the year;
  5. A Report on the supervisory tasks that have been performed by the Board of Directors during the previous financial year; and
  6. The names of the members of the Board of Directors and the Board of Commissioners, as well as the salaries of each member, including any allowances and/or benefits each of them has received in the closing Financial Year.

WHO IS RESPONSIBLE TO MAKE ANNUAL REPORT
As previous explained that the Board of Directors obligated to make Annual Report, and submits the Annual Report to the Board of Commissioners to be verified and approved.

After the Board of Commissioners gives its approval, the Board of Directors is responsible to hold the AGMS for presented the Annual Report before the shareholders of the Company to be approved. Please be informed that the AGMS can be approved though Extraordinary GMS (EGMS) or by Circular Resolution of Shareholders.

DEADLINE OF ANNUAL REPORT
An Annual Report must be conducted and approved at the latest 6 (six) months after the end of the company’s Financial Year.

Any lateness in submission of Annual Report is the responsibility of the Board of Directors, and the members of the board can be hold jointly and severally liable to any party that suffers losses due to their negligence in submitting an annual report. However, the Company Law does not set any applicable sanctions for the Board of Directors who fail to submit an Annual Report in a Financial Year to the GMS.

Commonly Indonesian company Financial Year is 1 January to 31 December, however, the company may change the Financial Year to follow the head quarter Financial Year. Please read our related link regarding the Financial Year.

HOW CAN SMART CONSULTING HELP YOU?
To ensure a smooth investment and business operation from the legal perspective, but also still focus on maintaining your business in Indonesia and reach your revenue target, it is advised for you to find capable and trusted lawyers or legal consultants for advice and assistance in ensuring your legal compliance with prevailing trading laws and regulations.

SMART Consulting is an Indonesian Corporate Legal Services firm. We have assisted local and multinational companies in handling their corporate legal matters, including matters related to company annual obligations, such as preparing shareholders general meetings and resolutions, as well as acting in a legal advisory capacity for the company.

Contact Us Now to get your legal solution for your business goals, and still comply with the prevailing laws and regulations.
E: info@smartcolaw.com
H: +62821-1234-1235

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