Entrepreneurs, here are the types of CVs that you must know

As you know, there are many business models operating in Indonesia. One of the most popular types of business entity is the Commanditaire Vennootschap (CV). Although it looks simple, but in practice, it turns out that there are various types of CVs. Yes, as a form of business entity that has proven to be flexible and effective, understanding the various types of CVs is not only relevant for business owners and investors, but also important in ensuring the sustainability and health of their business. Therefore, in this article, we will explore what the types of CVs are. The types of CVs themselves are distinguished based on two things, namely based on their development and based on the relationship of the CV to third parties. Check out the explanation until the end!

What is a CV?

A limited liability partnership (CV) is a form of business entity formed by two allies. The two allies are active allies (allies who run and represent the company) and passive allies (allies who only provide capital for the company). The legal basis for the existence of CV is mentioned in several legal sources as follows:

1. Kitab Undang-Undang Hukum Dagang (KUHD) articles 19-21 discuss the establishment, capitalization of CVs, and discussion of active and passive allies.
2. Minister of Law and Human Rights Regulation No. 17/2018 which addresses the registration of CVs, firm partnerships, and civil partnerships.
3. KUHD article 31 which discusses the dissolution of CV.
4. Civil Code (KUHPer) articles 1647 and 1649 which discuss the dissolution of a CV.
5. ICC Article 1651 which discusses the inheritance of allies.

A CV is formed so that a business entity can carry out its business activities officially and legally according to the law. Because in general, CVs are established with a deed and registered through a notary so that they have a legal umbrella. Moreover, the presence of active allies who have full control over the management of the company allows for faster and more flexible decision-making in day-to-day operations. Meanwhile, with passive allies providing additional capital, CVs can raise more resources for business expansion and growth. In other words, the combination of expertise from active allies and capital from passive allies can generate synergies that improve company performance and growth.

Pros and Cons of CVs

The existence of the CV business entity option and the number of companies that choose this form as their business entity certainly suggests that CVs have advantages. Below are the advantages of CVs, among others:

1. The establishment process is relatively straightforward. Unlike a Limited Liability Company (PT), establishing a CV tends to be easier to do.
2. It is easier to get external capital assistance from either investors, banks, or cooperatives. Because of the legality of the law, CVs gain greater trust than unincorporated businesses.
3. Unlike a PT, there is no minimum limit on how much capital a CV must have.
4. Easier tax system. CVs are not subject to tax and are included in non-objective income tax.
5. Easier deed amendments. The owner can make changes to the deed without having to hold a meeting with the board first.

However, this does not mean that CVs have no disadvantages. Here are some of the shortcomings faced if KH Friend chooses a CV-shaped business entity:

1. There is a risk of conflict and friction among allied members.
2. Some allies have greater responsibilities, i.e. active allies who act as actors in the company’s activities, than other allies.
3. The progress and decline of a CV depends on active allies, so the survival of the company is uncertain.
4. It cannot be declared bankrupt, so that if a loss occurs and the company’s assets are not sufficient to bear the loss, the active allies have the obligation to bear the loss even if they have to use their personal assets. Meanwhile, passive allies are only responsible for the amount of capital invested in the CV.
5. Capital is difficult to withdraw.

What are the different types of CVs?

In practice, the types of CVs are distinguished based on two things, namely:

Types of CVs Based on Their Development

If based on their development, the types of CVs are as follows:

CV Murni

In a pure CV, the company consists of one active ally and several passive allies. This means that the CV is dominated by passive allies who only provide capital. This pure CV is also the earliest and simplest form of CV.

Mixed CV

A mixed CV usually originates from a partnership of firms. So when a firm needs additional capital for its business, it will offer it to allies in the firm itself or third parties outside the firm’s current allies. Later, those who provide additional capital will act as passive allies. While the rest of the firm’s allies automatically become passive allies. But keep in mind, with the existence of two kinds of allies, the firm turns into a CV. so changes need to be made in the Articles of Association of the Company.

CV Bersaham

These shares are not marketable securities. They are also not included in the initial capital of a CV. They are usually issued to run the business and operations of the company. This is because the initial paid-up capital has usually been converted into company assets. So that the initial capital has become frozen capital. Now, to get liquid funds, CVs issue shares that can be owned by active and passive allies. It is also possible that a CV that issues shares to its allies is intended to convert the CV into a PT. because in the Articles of Association of a PT, share ownership must be stated among the founders.

Types of CV Based on CV Relationship to Third Parties

In addition, the types of CVs based on relationships with third parties, which are more technical operations of the company, include the following:

CV Discreetly

In this type of CV, the company does not present itself to third parties as a CV. Third parties will see it as an ordinary trading business or a firm. However, within the company, there is a division of authority based on active and passive allies.

CV Terang-Terangan

This is the opposite of a silent CV. An overt CV is where the company has shown to third parties that it is a CV business entity. This is shown from the registered deed of establishment, company signboard, correspondence in the name of the CV, and others.

READ ALSO: This is the difference between PT and CV that you must know!

Hopefully, by understanding the types of CVs, it can add insight into how to choose a business structure as a solid foundation for long-term growth and success in an increasingly dynamic business world.

KH Contact

Well, for those of you who currently want or are running a company in the form of a CV and need consultation regarding its establishment and operation, you can immediately contact Kontrak Hukum. We have been trusted by more than 5000 companies in Indonesia in fulfilling their business needs, including business entity establishment services that are completed in a matter of hours! Guaranteed to be easy and legal because the establishment of a CV at Kontrak Hukum already includes legalities such as deeds, SK, NIB, OSS, and NPWP. For booking information, please visit the KH Services – CV Establishment page. If you have questions about business entities or other businesses, you can also consult at Tanya KH and via direct message (DM) to Instagram @kontrakhukum.