Currently, the franchise business is growing rapidly in Indonesia. No wonder, considering that this business system can provide the benefits of a wide business network for small business owners and offers a faster chance of success than business people who start their own business from scratch. Well, if Friend KH also wants to develop a business into a franchise or franchise, there are several legal documents that must be taken care of, one of which is a franchise agreement. This agreement contains an agreement between the profit owner (franchisor) and the recipient or buyer of profit (franchisee) such as the rights and obligations of each party, financing agreements, and so on. But before making a franchise agreement, there are other legal documents that need to be taken care of, namely a franchise business license or franchise. Then, how is a franchise business license done? And what are the legality documents needed for a franchise business? Check out the following review! As is known, most business licensing is now carried out through the Online Single Submission (OSS) system, including for franchise businesses. But before making a franchise business license, referring to the Minister of Trade Regulation No. 31/M-DAG/PER/8/2008 concerning the Implementation of Franchising, there are several requirements that you need to complete when establishing a franchise business, including pre-contract requirements, administrative requirements and technical requirements.
Pre-Contract Terms
Taxpayer Registration Number (NPWP)
As a business owner who wants to franchise, KH Friend is required to have a Taxpayer Registration Number (NPWP) on behalf of the individual / business entity. NPWP also functions as a means or tool in managing tax administration which also affects financial administration. By having an NPWP, KH Friend as a business owner helps maintain order in tax payments and administration.
Trade Business License (SIUP)
SIUP is a license issued by the local government to entrepreneurs to conduct business in the field of trade and services. Although SIUP is the most common business license, its scope is only limited to trade and service businesses. So, if the company is engaged in other business fields, it needs to take care of other types of business licenses besides SIUP.
Company Registration Certificate (TDP)
TDP is an attestation document that states that your startup has fulfilled its company registration obligations. Before the government issued Government Regulation No.24/2018 on Electronically Integrated Business Licensing Services, TDP could only be processed after you had made a deed of establishment, SKDP, NPWP, and SIUP. But now, you can directly apply for a TDP through the Online Single Submission (OSS) system after you have made the deed of establishment. However, if you already have a Business Identification Number (NIB), you will automatically have a TDP as the NIB serves as an endorsement of the TDP.
Proof of Intellectual Property Rights (IPR)
Before running a franchise business, it is necessary to officially register IPR with the Directorate General of Intellectual Property (DJKI) of the Ministry of Law and Human Rights. IPR itself can be divided into two types, namely copyright and industrial property rights. Those included in copyright type IPR include computer programs, science, art and literature. Meanwhile, industrial property rights consist of patents, trademark rights, industrial designs, and also geographical indications.
Franchise Prospectus
The franchise prospectus registered by the franchisor must contain the following points:
- Franchisor identity data
- Franchise business legality such as SIUP
- History of business activities
- Franchisor’s organizational structure
- Financial statements for the last two years (except micro and small businesses)
- Number of business premises
- List of franchisees
- Rights and obligations between franchisor and franchisee
This franchise prospectus must be submitted to prospective franchisees at the time of the offer or at least two weeks before franchise registration.
Administrative Requirements
- Application form for Franchise Registration Certificate (with business entity seal, signature of director or business owner, and stamp duty)
- Photocopy of Applicant’s ID card with original ID card
- Copy of franchise prospectus
- Copy of franchise agreement
- Copy of business license
- Copy of proof of IPR registration
- Labor usage details
- Composition of franchised goods/raw materials
- Power of attorney stamped (if taken care of by a third party)
- Power of attorney (if through an intermediary)
- Copy of deed of establishment for legal entities
- Copy of NPWP of individual or business entity
- Proof of membership of BPJS Employment and BPJS Health
Technical Requirements
- Recommendation letter from the Trade Office
- 80% of the business equipment and merchandise in a franchise business must be domestically produced
- Franchisors must work with small and medium-sized enterprises to fulfill the franchisor’s requirements.
Franchise Business License Procedure
After completing the required documents above, then KH Friend can proceed to the stage of making a franchise business license. The franchise business registration can be done through the OSS page with the following procedures:
- Register through https://oss.go.id/oss/ and fill in information on the list menu, and email account validation and user ID and password to log in.
- Get NIB (Business Identification Number)
- Issuance of Franchise Registration Certificate (STPW)
- Fulfillment of commitment requirements such as fulfilling prospectus and franchise agreements
- Issuance of STPW by the Directorate of Business Development and Trade Distributors and/or the Investment Office as well as by the District and City PTSPs.
How, pretty easy right? The most important thing is that KH Friend must first fulfill business legality documents such as business licenses, NPWP, and IPR so that in the future franchise business registration can be done easily.
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What are you waiting for? Immediately enjoy excellent Legality Services from Kontrak Hukum! If you have further questions about the franchise business, KH Friends can also contact us via the following link Ask KH.
