CORPORATE ACTION DEEDS

Category: Notary Services
Written by Detty Amelinda Shantika Putri on 26/09/2022
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.

Corporate Action is a company’s effort to expand its business opportunity. All of the Corporate Actions will impact the company, Board of Directors, Board of Company, and shareholders. Hence, it needs a notarial deed for all of the Corporate Actions taken for it to be used as evidence.

WHAT IS A CORPORATE ACTION?

Corporate Actions are actions taken on behalf of the corporation. Corporate Action includes any action taken by the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders. Actions taken on behalf of the corporation must obtain approval from the board of commissionaire and/or the General Meetings of Shareholders.

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TYPES OF CORPORATE ACTIONS

There are two types of corporate actions in general: Corporate Actions that Affects the Number of the Company’s Shares and Corporate Actions that Restructure the Company itself.

  1. Corporate Actions that Affect the Number of the Company’s Shares includes:

    1. Buy Back Shares:
      Buy Back Shares mean the repurchasment of shares that have been sold to the public by the issuer for a public company.
    2. Right Issue:
      Right issue is the privilege to be offered for buying shares first before the shares are sold in the stock market, obtained by the shareholders whose name has been recorded in the register as a shareholder in the corporation.

  2. Corporate Actions that Restructure the Company includes:

    1. Merger:
      Merger, in general, means the merging of two or more companies into one company. Merger & Acquisition will cause the transfer of all assets and liabilities of the merging company into the surviving company.
    2. Acquisition:
      Acquisition is the takeover of the shares ownership of a company by another company, whether wholly or partly. All companies will still exist as separate companies, but one or more companies will be listed as a shareholder.
    3. Consolidation:
      Consolidation is a corporate action carried out by two or more companies to merge into a new company by establishing a new one. The Legal entity status of the consolidating company will cease by law.

Most of the corporate actions that the company does, whether the Corporate Actions that Affect the Number of the Company’s Shares or the Corporate Actions that Restructure the Company need a notarial deed, in accordance with Law Number 40 of 2007, regarding Limited Liability Company.

WHY DOES CORPORATE ACTION NEED A NOTARIAL DEED?

A notarial deed is a copy made to be used as evidence of an event that needs to be signed by the stakeholders. A notarial deed acts as evidence of any dispute for any event in the company since it can be considered written evidence. The notary also can act as a witness to the legal actions of a company.

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STEPS NEEDED TO CONVEY CORPORATE ACTION INTO A NOTARIAL DEED

There are a few steps needed before the notarial deed can become a final copy of the notarial deed. The parties must submit their personal data to be used at the beginning of the deed. If the parties are a corporation, then the corporation must submit all of the notarial deeds that they have beforehand. The stakeholders also need to discuss the corporate actions’ agenda with the notary before it is written in the minutes.

Once all stakeholders have signed the minutes, the notary will revise the minutes first before it is written in the notarial deed copy or the final deed of the notary. When all the stakeholders, the witness, and the notary have signed all the deed copies, the deed becomes final and binding.

HOW CAN WE HELP

Putranto Alliance is the right choice for your corporate action needs since Putranto Alliance established its early presence as a notary firm. We can assist you in preparing your corporate action needs, from establishing a new company and transactional agreements to general meetings of shareholders. Hence, we are the solutions to be your partner in achieving your corporate action needs.

REFERENCES

Law Number 40 of 2007, regarding Limited Liability Company

Civil Law of Indonesia

Journal, Missariyani, “Akta Notaris Sebagai Alat Bukti Dalam Penyelesaian Perkara Perdata”

FAQs

It can be harmful and risky for the company itself since, as stipulated in Law Number 40 of 2007, regarding Limited Liability Company, an inspection of the company can be done if it causes an adverse effect to the company or shareholders or the third parties. It will also lead to the company will have to encumber the compensation for all or part of the inspection cost.

A Corporate Action cannot be done without a notarial deed since it involves the importance of many stakeholders (for instance, the creditors and shareholders) in accordance with Law Number 40 of 2007.

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