Shareholders, directors and commissioners can be liable to third
parties under certain circumstances:
1. Shareholders: Article 3 of the Indonesian Company Law provides,
inter alia, that the shareholders of a limited liability company
may be personally liable for company losses in the following situations:
(i) the relevant shareholder either directly or indirectly
in bad faith uses the company solely for personal purposes;
(ii) the relevant shareholder is involved in unlawful acts
committed by the company; or
(iii) the relevant shareholder, either directly or indirectly,
unlawfully uses the company's assets, causing such company's
assets to be inadequate to settle the company's debts.
2. Directors: Article 90 of the Indonesian Company Law also provides
that if bankruptcy occurs due to the fault or negligence of the
Board of Directors and the Company's assets are insufficient to
cover losses incurred as a result of such bankruptcy, each member
of the Board of Directors is jointly and severally liable for
such losses.
Article 85 Paragraph 2 of the Indonesian Company Law provides
that each member of the Board of Directors of a company is individually
responsible, if he has committed a wrongful act, or is negligent
in conducting his duties with good faith and with full responsibility
for the interests and business of the company.
Furthermore, pursuant to Article 79 Paragraph 3 and Article 96
of the Indonesian Company Law, members of the Board of Directors
or the Board of Commissioners who are responsible for the bankruptcy
of another company are not eligible to be appointed as members
of the Board of Directors or Board of Commissioners of any company
for a minimum period of five years.
3. Commissioners: Article 100 paragraph 3 of the Indonesian Company
Law imposes the same standard of care on Commissioners as Directors,
and Commissioners can be held liable as Directors if they assume
a management role.
With regard to criminal sanctions due to non-payment of debts
by a corporate debtor, Chapter XXVI of the Indonesian Criminal
Code regulates the provisions on actions damaging the interests
of creditors. Article 403 of the Indonesian Criminal Code provides
that members of the Board of Directors and Board of Commissioners
of a company who participate in assisting or who permit any action
contrary to the articles of association of the company, and who
therefore cause the company not to fulfill its obligations or
cause its dissolution, shall be subject to a maximum fine of one
hundred fifty thousand rupiah (approximately US$20). This monetary
amount is contained in the original legislation, when the Rupiah
value was considerably different than it is today. However, the
amount of the fine has not been revised. There is no imprisonment
sanction.
