It depends who owns the shares. A company (PT) generally needs its shareholders' approval to pledge more than half its net assets under Article 102 of the Company Law, and an individual may need a spouse's consent where the shares are joint marital property. A lender will ask for evidence of both before funding.
Key takeaways
- Company borrowers face a 50% test. Under Article 102 of Law No. 40 of 2007, directors need RUPS approval to pledge company assets worth more than 50% of net assets, in one transaction or several.
- The articles can add a layer. A company's articles of association may require the board of commissioners to approve a pledge.
- Joint marital property needs both spouses. Property acquired during a marriage is joint property, and a spouse acts on it with the other's consent, unless a marriage agreement separates it.
- The listed company does not approve the pledge. Shares can be pledged unless the company's articles say otherwise, and the pledge is recorded in its shareholder register.
- OJK hears from the shareholder. A pledge of shares carrying 5% or more of the voting rights is reported to OJK within three working days.
Does a PT need RUPS approval to pledge shares?
Yes, if the pledge, alone or together with other transactions, covers more than 50% of the company's net assets. Article 102 of the Company Law requires the directors to obtain RUPS approval before using company assets of that size as security for debt.
For a holding company whose main asset is a listed stake, a pledge of that stake can easily cross the line. The resolution needs at least three-quarters of the voting shares present and at least three-quarters of the votes cast in favour, unless the articles set a higher bar; if the quorum fails, a second meeting can decide with two-thirds present, still by three-quarters of the votes cast (Article 89).
Two qualifications apply. The rule does not cover pledges the directors make in carrying out the company's business under its articles, and a pledge made without approval still binds the company if the lender acted in good faith (Article 102(3) and (4)). A lender will not want to rely on either.
The articles of association can add a further step. Under Article 117 of the Company Law, they may require the board of commissioners to approve particular legal acts, which can include a pledge; as with RUPS approval, an act done without it still binds the company where the other party acted in good faith.
When does an individual need a spouse's consent?
When the shares are joint marital property. Under the Marriage Law, property acquired during a marriage is joint property, and a husband or wife acts on joint property with the consent of both, so pledging such shares needs the spouse's consent.
Property each spouse brought into the marriage, and anything received as a gift or inheritance, stays under that spouse's control unless the couple agreed otherwise (Article 35(2)). Shares in that category can be pledged by the holder alone, though a lender will want to see how they were acquired.
A marriage agreement can change the position. Since the Constitutional Court's decision 69/PUU-XIII/2015, couples can make one before or during the marriage, validated by the marriage registrar or a notary. Where it separates property, each spouse deals with their own shares, and a lender will ask for a copy.
Foreign spouses, marriages registered abroad and holdings through trusts or nominees raise their own questions, which are for Indonesian counsel.
What resolutions and documents will a lender ask for?
Documents that prove each approval the pledge needs. For a company, that means its current articles of association, the directors' authority to sign, and any RUPS or commissioners' approval; for an individual, identity documents, evidence of marital status and, where needed, the spouse's consent or the marriage agreement.
The table summarises the main cases.
| Borrower | Approval | Legal basis | Document |
|---|---|---|---|
| Company (PT) pledging more than 50% of its net assets | RUPS approval: three-quarters of voting shares present, three-quarters of votes cast | Law No. 40 of 2007, Articles 102 and 89 | RUPS minutes or deed of resolution |
| Company (PT) whose articles require it | Board of commissioners' approval | Law No. 40 of 2007, Article 117 | Commissioners' approval and current articles of association |
| Married individual, shares acquired during the marriage | Spouse's consent, unless a marriage agreement separates property | Law No. 1 of 1974, Articles 35 and 36; Constitutional Court decision 69/PUU-XIII/2015 | Spouse's written consent, or the marriage agreement |
| Individual, shares held before marriage, gifted or inherited | None from the spouse, unless the couple agreed otherwise | Law No. 1 of 1974, Articles 35(2) and 36(2) | Evidence of how and when the shares were acquired |
| Any shareholder | None from the listed company, unless its articles restrict pledges | Law No. 40 of 2007, Article 60(2) | The listed company's articles of association |
Lenders also run their own know-your-customer checks, and the pledge itself is documented in a deed and registered through the custodian at KSEI. Our guide on how to get a stock loan in Indonesia sets out the full sequence.
Does the listed company have to approve or announce the pledge?
No approval is needed unless the listed company's articles restrict pledges: under Article 60 of the Company Law, shares can be pledged unless the articles provide otherwise. The pledge is recorded in the company's shareholder register, and the reporting duty to OJK sits with the shareholder.
For scripless shares, KSEI notifies the issuer when it freezes shares for a pledge. Voting rights on pledged shares stay with the shareholder (Article 60(4)).
A pledge of shares carrying at least 5% of a listed company's voting rights, in one pledge or cumulatively, must be reported to OJK by the pledging shareholder within three working days of signing, through KSEI's AKSes system. Pledge reports are not among the reports OJK makes public; our note on OJK disclosure and share pledge reporting explains the detail.
In a family holding structure, the approvals follow the chain. If the holding company pledges, its RUPS and possibly its commissioners approve; if family members also pledge shares they own personally, spousal consent may be needed for each. Our article on funding family-business succession with a stock loan looks at those structures.
This article is general information about share-backed financing in Indonesia and is not legal, tax, or financial advice. Corporate and marital approvals depend on the borrower's articles of association, marital arrangements and the facts of the transaction; confirm what your pledge needs with your own Indonesian counsel.
