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Types of company shares in Indonesia.

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Types of company shares in Indonesia

This article is an outline of the types of company shares in Indonesia.

Before investing in shares and becoming a shareholder, it is important that you understand what the types of shares are and the various aspects concerning company shares.

Let’s start with the different types of shares.

There are two types of company shares in Indonesia which are the common shares and the preferred shares.

Common shares

Common shares give shareholders equality and no special privileges. Common shareholders are paid dividends, but the dividends are paid after preferred shareholders. If the company has to sell the assets, the common shareholders will not be paid until all creditors have been satisfied, and the preferred shareholders have been paid back.

Based on article 5, common shareholders are entitled to:

  • Attend and cast votes in the general meeting of shareholders (GMS)
  • Receive dividend payment and the remainder of assets after liquidation
  • Exercise other rights as stated in the Company Law

Preferred shares

Preferred shares are also known as preference shares. Preferred shareholders are paid fixed dividends and assets before common shareholders if the company enters bankruptcy. However, this type of share does not hold any voting rights. Therefore, preferred shareholders cannot vote or elect any corporate policy or board of directors.

Share classification

Under article 53 of the Company Law, if there are more than one share classification, the articles of association must determine one of them as the common shares.

The share classifications are:

  • Shares with voting rights or without voting rights
  • Shares with special rights to nominate members of the board of directors and/or member of the board of commissioners
  • Shares which after a certain period of time will be withdrawn or exchanged with other shares classification
  • Shares which provide rights to its owner to receive dividends firstly over the other shareholders from different shares classification for the distribution of dividend cumulatively or non-cumulatively
  • Shares which provide rights to its owner to receive an allocation of the remainder of the company’s assets in liquidation firstly over the other shareholders with different shares classification

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Rights associated with shares

Pre-emptive rights

According to article 43, all shares issued for the increase of capital must first be offered to each shareholder in proportions to their share ownership for the same classification of shares.

Rights to file claims to the court

Shareholders have the right to file claims against the company to the district court if they are affected by the actions of the company, which are considered as unfair or unreasonable.

Rights of shares to be purchased at a reasonable price

Shareholders have the right to request the company to purchase the shares at a reasonable price if the shareholder does not agree with the action of the company that may cause damage to the shareholders or company, such as the amendment of the articles of association, the transfer of the company’s assets that have a value of more than 50% of the net assets of the company, or merger, consolidation, acquisition or separation.

Right to request the district court to convene the GMS

If the board of directors or board of commissioners fail to call the GMS within 15 days after the request has been received, the shareholders requesting the GMS can submit a request to the head of the district court to give permission to the shareholder to call for the GMS.

Right to attend the GMS

Shareholders have the right to attend the GMS and use their available voting rights in accordance with the number of shares they hold.

Transfer of right of shares

Under article 56 of the Company Law, transfer of right of shares can be done by a deed of transfer of rights. The hard copy of the deed of transfer of rights and the copy must be delivered to the company in writing. The board of directors are required to register the transfer of rights over shares, dates and days of the transfer in the shareholder register or the special register and notify any changes of the shareholders to the minister and be recorded in the company registry not later than 30 days after the registration date of the transfer of rights. If a notification has not been made, the minister may reject the application.

Article 57 states the requirements concerning the transfer of rights over shares:

  • The obligation to offer pre-emptive rights to the shareholders with a certain classification or to other shareholders
  • The obligation to obtain prior approval from the GMS, board of directors and board of commissioners
  • The obligation to obtain prior approval from the authorised institutions in accordance with the provisions of the legislation

If the company’s articles of association require the selling shareholder to first offer their shares to shareholders of a specific classification of shares or to other shareholders, and within 30 days the shareholders do not buy the shares, the selling shareholder will then be able to sell the shares to a third party.

Buy-back of shares

Under article 37, companies may buy-back shares that have been issued under the following conditions:

  • The buyback of shares must not result in the net assets of the company becoming less than the issued capital plus the statutory reserve that has been set aside
  • The amount of nominal value of all shares buy back by the company and the pledge of shares or the fiduciary security on shares held by the company itself, and/or other company which shares are directly or indirectly owned by the company does not exceed 10% from the amount of issued capital in the company

The shares buy backed by the company can only be owned by the company for not more than three years.


The types of company share in Indonesia give its holder’s different rights in a company and when you hold shares, you own part of the company. Get in contact with Acclime if you need any support with your company’s shares.

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Acclime helps established multinational companies and startups start and operate their business in Indonesia and beyond. By seamlessly navigating our clients through the complexities of the local regulatory systems, we maximise opportunities while ensuring compliance and good governance.

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