The enactment of the Job Creation Law is one of the ways the government is improving the ease of doing business in Indonesia. Through this law, the government hopes to provide protection and legal certainty, especially for Micro and Small Enterprises (MSEs) and Cooperatives. It is undeniable that MSEs have received the freshest breeze after the enactment of the Job Creation Law and its derivative regulations. This is because the government offers various facilities and benefits for MSEs from establishment, licensing, guidance, financing facilities and fiscal incentives, special allocation funds, to legal assistance and assistance. Through PP No. 8 of 2021, businesses that meet the criteria of MSEs are now also given the opportunity to establish a business entity in the form of a PT. Well, to find out more about the establishment procedures, business criteria that fall into MSEs, and how much capital to establish a PT for MSEs, Kontrak Hukum will discuss it in the following article. Check out the discussion until the end!
Definition
In PP No.8 of 2021, a limited liability company is now defined as a legal entity that is a capital alliance, established based on an agreement, conducting business activities with authorized capital that is entirely divided into shares or individual legal entities that meet the criteria of micro and small businesses. The individual legal entity in question is also known as an individual company.
Micro and Small Business Criteria
Article 35 of Government Regulation No. 7/2021 states that the criteria for micro and small businesses are categorized based on business capital or annual sales. The business capital criteria referred to consist of:
- Micro enterprises have a business capital of up to a maximum of IDR 1 billion excluding the land and building where the business is located.
- Small businesses have a business capital of more than IDR 1 billion up to a maximum of IDR 5 billion excluding land and buildings of the business premises.
The annual sales result criteria consist of:
- Micro enterprises have annual sales up to a maximum of IDR 2 billion.
- Small businesses have annual sales of more than IDR 2 billion to a maximum of IDR 5 billion.
Capital Requirements
Similar to other business entities, a company must also have an authorized capital. According to Article 3 of PP No. 8 of 2021, the amount of the company’s authorized capital can be determined based on the decision of the founders of the company. However, the authorized capital of the company must be issued and fully paid at least 25% (proven by valid proof of deposit). The valid proof of deposit must then be submitted electronically to the Minister of Law and Human Rights through the Directorate General of AHU within a maximum of 60 days from the date of filling out the statement of establishment.
Requirements for Establishing a PT for MSEs
An individual company is established by an Indonesian citizen by completing a statement of establishment in the Indonesian language. The Indonesian citizen in question must fulfill the requirements:
- Be at least 17 (seventeen) years old.
- Legal capacity.
Establishment Procedure
As mentioned earlier, to establish an individual company, business actors are required to fill out a declaration of establishment and register it electronically. The statement of establishment contains data related to the company and the business owner, including:
- Name and domicile of the individual company.
- Period of establishment of an individual company.
- Purpose and objectives and business activities of the individual company.
- Total authorized capital, issued capital, and paid-up capital.
- Nominal value and number of shares.
- Individual company address.
- Full name, place and date of birth, occupation, residence, population identification number, and tax identification number of the founder as well as the director and shareholder of the individual company.
Keep in mind that the name of the company cannot be the same as the name of a previously registered company, so business actors also need to check the name first. An individual company will obtain legal entity status after registering the statement of establishment and obtaining an electronic registration certificate from the Directorate General of AHU. Individual companies that have obtained legal entity status will also be announced on the official website of the Directorate General of AHU.
Financial Report
After being a legal entity, an individual company has the obligation to make a financial report no later than 6 months in the current fiscal year calculated since the company obtained legal entity status. The format for submitting financial statements must contain at least :
- statement of financial position;
- income statement; and
- notes to the current year’s financial statements.
Individual companies that do not submit financial statements may be subject to administrative sanctions in the form of a written warning, termination of access rights to services, or revocation of legal entity status.
Changes
If the individual company then experiences business progress and no longer meets the criteria as MSEs, conducts mergers or acquisitions, and/or the shareholders increase to more than one person, the individual company must change its status to PT Persekutuan Modal as stipulated in the Company Law. The change in status must be made by notarial deed and registered electronically with the Minister of Law and Human Rights through the Directorate General of AHU.
KH Contact
Well Friend KH, that is the explanation of the procedure for establishing PT for MSEs, business criteria that fall into MSEs, and capital provisions that apply to PT for MSEs. If you still have questions about the establishment procedure, want to do business consultation, or need help to fulfill the legality of your business, do not hesitate to contact Kontrak Hukum at the following link Tanya KH or through social media instagram @kontrakhukum. For more information, you can also visit our website at www.kontrakhukum.com.
