Principal Petitioner Zainal Abidinsyah Siregar and attorney in the ruling hearing of the judicial review of the Law on Limited Liability Companies (PT Law), Wednesday (13/3) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Ganie.

JAKARTA, Public Relations of the Constitutional Court—The Constitutional Court rejected the entire judicial review petition of Law No. 40/2007 on Limited Liability Companies (PT Law). The decision was read out by Chief Justice Anwar Usman in the ruling hearing of the judicial review of case No. 63/PUU-XVI/2018 requested by PT Baraventura Pratama and individuals Zainal Abidinsyah Siregar and Erwin Susanto in the Plenary Courtroom of the Constitutional Court on Wednesday (13/03/2019).

Regarding the subject of the petition, Constitutional Justice Suhartoyo said that according to the Elucidation to Article 146 paragraph (1) letter c point a of the PT Law reads, "On the grounds that the company is not in a condition to continue its operations include among others: a. The company has not undertaken business activities (non-active) for 3 (three) years or more, as evidenced by a notification letter submitted to the tax authority; b. if most of the addresses of the shareholders are unknown even though they have been summoned through advertisements in newspaper, so that the GMS cannot be convened; c. if the balance of share ownership in the company of which the GMS is unable to issue legitimate decisions, e.g. 2 (two) shareholders respectively own 50% (fifty percent) of the shares; or d. the company’s assets have been reduced such that the company cannot continue its business activities with the existing assets," points a to d were prefaced with the phrase “among others.”

The phrase “among others” makes the reasons not cumulative, but alternative in nature. This means that each condition may stand on its own. In fact, the use of the phrase also means that there might be other conditions other than those stated in the elucidation to the a quo article. Therefore, the phrase “among others” is used in the elucidation to explain a dynamic and plural material, making it hard to view it as limiting.

"Thus, the Court is of the opinion that Article 146 paragraph (1) letter c of the PT Law is clear enough that the reasons described in the elucidation of the a quo article are only examples and can be used as alternative stand-alone reasons,” Justice Suhartoyo explained in the session presided over by Chief Justice Anwar Usman. 

Legal Subject

The Petitioners argued that the elucidation to the a quo article point a on the parties authorized to submit a notification letter to the tax authority because the companyhas not undertaken business for three years. In response, the Court believes that it should be noted that the company\'s dissolution application that can be submitted by shareholders, directors, or board of commissioners is a formal requirement regarding the legal subject for filing the application in the district court. “So, the requirement is having [legal] standing to file the company\'s dissolution application. The formal requirement is absolutely needed to be attached to the material requirement, that is, the reasons for the company\'s dissolution application in the district court,” Justice Suhartoyo explained.

With regard to the parties authorized to submit a notification letter of company dissolution to the tax authority, the Court believes that the Petitioners should understand the overall perspective of the authority and function of each company’s organ. Article 1 number 5 of the PT Law also clearly states that there is no other company organ that can act as a legal object that has full authority and responsibility for the management and representation of the company, both inside and outside of the court. Therefore, as long as the authority and responsibility are still attached to the board of directors or are not permanently revoked by the GMS, it is clear that the legal subject is the board of directors as the organ of the company authorized for that. In other words, in the a quo case, as long as the company has not been granted a request for dissolution by the district court, the company still exists and is the responsibility lies with the board of directors. "Considering the legal considerations, the petition for the unconstitutionality of the Elucidation to Article 146 paragraph (1) letter c point a of the PT Law is unreasonable according to law," Justice Suhartoyo said. (Sri Pujianti/LA/Yuniar Widiastuti)