Unlike other unincorporated business entities, a Commodities Partnership (CV) has two types of allies to operate. These are active (complementary) allies and passive (committal) allies. Both must be present in a CV, not just one. This is in accordance with Article 1 point 1 of the Minister of Law and Human Rights Regulation No. 17/2018 on the Registration of Commoditer Partnerships, Firm Partnerships, and Civil Partnerships (Permenkumham 17/2018) where “A Commoditer Partnership, hereinafter referred to as CV, is a partnership established by one or more commoditer allies with one or more complementary allies, to run a business continuously”. Well, the two allies have differences, both in terms of their roles, authority, and responsibilities. If you are still confused about the difference between the two, let’s look at the differences between CV allies below.
CV at a glance
As mentioned, a CV is a partnership business entity managed by two or more people, where one of them acts as a capital ally, and the other runs the business directly. CV is one form of business entity that is often chosen by business actors in Indonesia. Even though it is not a legal entity, a CV will still stand strong for decades, as long as its sustainability is carried out properly. An example is CV Jaya Abadi, a business entity that owns the trademark “Regal” for the production of Marie biscuits. The continuity of management that makes CV successful is inseparable from the role of its resources, in this case the CV organs. Yes, although it is not as complicated as other business entities, the CV organs are unique characteristics possessed by CVs. CV organs are in the form of allies and consist of two types, namely active allies and passive allies.
What is an Active Ally?
Active allies, also known as complementary allies, are allies whose responsibilities are unlimited, and who receive dividends and wages. Active allies are allies who provide capital and run the business themselves. They are responsible for the debts and assets of the company. The party who is a member of this alliance is the person who directly runs the daily business, or a director who is fully responsible for the company. In practice, active allies are liable to the company and third parties, up to their personal assets. Third parties can only collect from the ally who is the main responsible party, and cannot collect directly from the active ally.
What is a Passive Ally?
Passive allies or what is commonly called committal allies are allies whose responsibilities are limited. These allies are needed for their skills, and do not run the company. So they only receive dividend distributions. Parties who are members of this alliance do not include capital in their own business, because they only have responsibility for the capital provided. In other words, passive allies are allies who invest capital and are liable for the amount of capital invested. Therefore, the involvement of passive allies is only limited to their invested capital.
What is the difference between an active ally and a passive ally?
From the explanation above, it can be concluded that the differences between active and passive allies can be seen in three aspects, namely differences in roles, authority, and responsibilities. Here is the explanation:
Role
Active allies can be said to be allies who are the administrators of the CV. The active allies are the ones who run the operations of the CV company, while the passive allies are the providers or suppliers of capital in the established CV. The capital can be in the form of money or objects.
Authority
Active allies act as managers of the CV company. Therefore, active allies are authorized to act on behalf of and represent the CV in legal relations with third parties. Meanwhile, passive allies cannot participate in running and working in a CV company. Even with a power of attorney from an active ally, passive allies are still not authorized to represent a CV company. This is in accordance with Article 20 of the Commercial Code. Passive allies can only put money or objects into the CV company treasury (inbreng) and are entitled to the profits of the CV company later.
Responsibility
Since the active ally plays a role in running the CV company, the active ally is responsible up to their personal assets against third parties. This is in accordance with Article 1 point 4 of Permenkumham 17/2018. Even if there are debts made by one active ally, the other active allies are jointly and severally liable for them. Meanwhile, passive allies are only responsible up to or to the extent of the capital they have paid into the CV company, so that their other personal assets are free from that responsibility. However, if the passive allies are not proven to have participated in managing and running the CV company, then they become jointly and severally liable up to their personal assets (Article 21 KUHD).
Pros and Cons of Active Allies and Passive Allies
The advantage of active allies is that they can run the CV company and develop its business, without being interfered by other parties. The disadvantage is that active allies must be fully liable up to their personal assets for the debts of the CV company, including if the debts are made by other active allies.
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The advantage of passive allies is that they are not absolutely liable for the CV company, but only to the extent of their paid-up capital. However, the disadvantage is that passive allies may not interfere in the leadership of the CV company.
KH Contact
This is an explanation of active and passive allies in a CV, including the differences and advantages and disadvantages of both. As a business owner, it is important to know the role and contribution of each ally, both active and passive. This will help you clearly understand the level of involvement of all parties in the business, as well as how they contribute to the success of the company. If you have other CV-related questions, you can also consult with Kontrak Hukum. We have been trusted by more than 5000 companies in Indonesia to fulfill their business needs, including those related to the establishment and management of CVs. For more information, please visit the KH Services – CV page. Or if you want to consult about other forms of business entities, you can contact us at Tanya KH and via direct message (DM) to Instagram @kontrakhukum.
