As a businessman, KH Friend still likes to be confused, which legality should come first between licensing, brand registration, and business entity? Actually, which one to take care of first needs to look at business activities, business needs, and vision and mission. Because there are some businesses that must be run by establishing a business entity first, for example a fintech business. However, there are also businesses that are run individually, so you can start by taking care of business licensing first. Well, if you are a business beginner and can only take care of legality one by one, but are confused about which one to prioritize first, you can see the explanation in the following article.
The Importance of Business Legality
Before discussing further about the management, KH Friend needs to first understand what legality is and its importance for the sustainability of a business. Legality is a provision made for an act or object that will get validity from the party responsible for granting the permit. So, if a business wants to be recognized, it needs to take care of legality. This is important in business activities because it is an identity and identity that confirms a business so that later it is recognized by the community and the state. In addition, the existence of legality documents also brings a number of benefits to business actors and the business being run, namely:
Legal Protection
As mentioned, legality is intended to provide legal protection for businesses in accordance with the provisions and rules that apply in Indonesia. There are many businesses that initially run smoothly, but in the middle of the road, they are suddenly terminated. This is certainly not what KH pals want as business people, right? This is where KH pals must realize that business legality has an important role. By taking care of and having licensing documents in accordance with laws and regulations, you can run a business with a sense of security without worrying that the business will be suddenly frozen by the government.
Personal Assets Protected
Have you ever heard of a business going bankrupt and suffering huge losses, but the owners or shareholders are still able to carry on their lives as usual? How is that possible? Of course, this is possible if you have a business in the form of a legal entity such as a PT that can protect your personal assets. As a legal entity, a PT is a separate entity that has its own liabilities and assets and can act on its own behalf like a human being. So, by establishing a legal entity as part of the legality of the business, KH Friend does not need to worry about personal assets being used to pay debts when the business goes bankrupt and suffers losses.
Expand Business to a Larger Scale
Along with the business journey, KH Friend certainly hopes that the business can continue to progress and develop. Having profits that continue to increase and consumers that continue to grow is one of the hopes of all business people. This is where capital becomes one of the important things that KH Friend needs when you want to develop your business to a larger scale. Well, with legality, access to capital loans becomes easier, either through banks or new investors.
Increased Business Credibility
Taking care of legality can also help business actors to increase credibility in the eyes of consumers, business partners, suppliers, investors, banks, and so on. Where, with clear legality, the business will be more trusted and considered more professional, so that target consumers no longer hesitate to choose the goods and services offered.
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In addition, with high credibility, business actors will also find it easier to get several projects. Because business legality is one of the requirements when a business or company participates in tenders or projects, both from private and government companies.
The sequence of taking care of business legality for beginners
Back to the question, between business licensing, brand registration, and business entity, which one should be taken care of first? For those of you whose businesses are still in the early stages, you can follow this order:
Business Licensing
First of all, KH pals can prioritize taking care of business licensing first. According to Article 4 of PP 5/2021, business licensing is one of the important aspects in running a business because it is a mandatory requirement for starting and conducting business activities. It is important to know, currently business licensing is adjusted based on the level of risk and scale of activities of Micro, Small, Medium Enterprises (MSMEs) and large businesses. The risk level division is as follows:
Low Risk
According to Article 12 of PP 5/2021, business activities with a low risk level only require a Business Identification Number (NIB) as a business license. For micro and small businesses, the NIB applies as an Indonesian National Standard (SNI).
Medium Low Risk
In accordance with Article 14 of GR 5/2021, business activities with a medium to low risk level require an NIB and standard certificate for business licensing. The standard certificate is proof that the business actor has met the requirements to carry out business activities.
Medium High Risk
Just like before, business activities with a medium-high risk level also require an NIB and a standard certificate (Article 14 of GR 5/2021). The difference is that the party that grants the license is the central or regional government based on the results of verification of compliance with business activity standards.
High Risk
In accordance with Article 15 of PP 5/2021, business activities with high risks need to apply for NIB and licenses granted by the central and regional governments to carry out operational activities. To take care of business licensing, KH Friend can take care of it through the OSS system.
Trademark Registration
After taking care of business licensing, KH Buddy can then protect the trademark by registering it. Given that trademark protection in Indonesia adheres to the first to file system, meaning that whoever registers first is entitled. Before registering, you should do a search first through brand analysis. Because if there are already registered trademarks and there are similarities either partially or completely, then your trademark is likely to be rejected.
Establishing a Business Entity
When your business starts to grow, you can expand your business by establishing a business entity, either a PT or CV. This can open up new opportunities, such as government tenders or attracting investors who want to invest in your business. As explained, regarding the establishment of a business entity, you must pay attention to the vision and mission and business activities carried out. Because there are some business activities that are required to be carried out with certain business entities. In addition, business entities will also be related to licensing and branding. Where licenses that have been taken care of on behalf of individuals cannot be transferred to business entities. So it is necessary to take care of licensing again. Meanwhile, trademark ownership can be transferred on behalf of a business entity, so there will be no problem if the trademark is registered on behalf of an individual first.
KH Contact
Taking care of legalities is not just a formality task, but also an investment in business sustainability and growth. By doing it correctly and on time, KH Buddy can protect the business from legal risks, increase credibility, and open up opportunities for greater development. Well, to facilitate the processing of business legality easily and quickly, Sobat KH can take advantage of the solutions offered by Kontrak Hukum.
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As a digital legal platform, we can help you take care of all your business legality needs, from business licensing, brand registration, to business entity establishment. Guaranteed safe and affordable because it is handled directly by notary experts and has been trusted. For service booking information, visit this page. If you have other questions, you can also consult for free at Tanya KH or send a direct message (DM) to Instagram @kontrakhukum.
