Business development is the target of every business actor. One of the efforts to achieve this is by changing the business entity from a Commodity Partnership (CV) to a Limited Liability Company (PT). It is important to know that CV and PT are two different things. The most basic difference is that CV is an unincorporated partnership and the liability of the management allies is unlimited, meaning that if there is a loss, the liability of the management allies reaches their personal assets. A PT is a legal entity and the liability of the founders is limited to the capital owned. CV is chosen by many business actors because in its establishment there is no minimum paid-up capital required, this is clearly regulated differently in the establishment of a PT. Due to these differences, upgrading a CV to a PT cannot be done automatically but there are several things that must be considered by business actors, namely:
Must Have the Consent of All Allies
Both active and passive allies must agree to the change of CV to PT in a meeting. If all have agreed, the results of the meeting are then made into an official report stating the agreement of all allies to change the CV into a PT.
Settle all CV engagements with third parties
Business activities often involve third parties in the form of agreements or engagements. These agreements and engagements must first be completed by the CV because they contain the rights and obligations of the CV concerned. If they have not been settled, then the allies cannot terminate the CV.
Adjust the Articles of Association (AOA) of the CV
This must be done because the Articles of Association of a CV do not contain provisions regarding authorized capital, issued capital, and paid-up capital like a PT. Moreover, because there is no separation of assets between the assets of the CV and the personal assets of the allies, there must be a revaluation of the assets owned by the CV. It is highly recommended to use the services of a public accountant to conduct the asset revaluation as this will ensure its accuracy. After that, the allies can determine whether the assets will be included in the authorized capital of the PT and how much each shareholder of the PT will share.
Making a Deed of Establishment of a PT at a Notary
Make a Deed of Establishment containing the AOA and other information relating to the establishment of a PT as stipulated in Article 8 of Law Number 40 of 2007 concerning Limited Liability Companies (PT Law).
PT Authorization Submission
The founders then jointly submit an application for legal entity validation through the information technology services of the electronic legal entity administration system to the Minister of Law and Human Rights by filling in the form containing at least: the name and domicile of the PT, the period of establishment of the PT, the purpose and objectives and business activities of the PT, the amount of authorized capital, issued capital, and paid-up capital, the complete address of the PT. The filling in of the form must be preceded by the submission of the name of the PT (Article 9 of the PT Law).
Minister Registers PT
If all requirements have been met in full, the Minister of Law and Human Rights issues a decree on the ratification of the PT’s legal entity which is signed electronically (Article 10 Paragraph 6 of the PT Law). After obtaining its legal entity, the Minister will register the PT in accordance with Law Number 3 of 1982 concerning Compulsory Registration of Companies.
Announcement in the Supplement to the Official Gazette of the Republic of Indonesia
The Minister of Law and Human Rights then announces the deed of establishment of the PT in theSupplement to the State Gazette of the Republic of Indonesia. The announcement is made no later than 14 days from the date of issuance of the Minister’s decision (Article 30 of the PT Law). In making changes, a CV does not have to be dissolved first. However, if it has obtained the status of a legal entity, the allies must determine the status of the CV. The choice is to liquidate or report the CV inactive. If not done, the Taxpayer Identification Number (NPWP) and CV Business License are still valid. This will impact the legal, tax and financial aspects of your business. Read also:
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Seeing the above provisions, changing a CV into a PT is not an easy matter. The arrangement must be done properly so as not to experience difficulties in the future. If you are confused in taking care of it, just trust Kontrak Hukum. We guarantee to complete your business legality matters to the end without any problems! Visit and contact:
