Creating and starting a business in Indonesia means that KH Friend must obey and comply with applicable rules and laws, without exception. One form of a company’s obedience to the law is by taking care of business legality documents for the business being run. Yes, business legality is a legal foundation that must be considered since KH pals want to start a business. The forms of business legality vary and are in accordance with the field or industry that KH Friend is running. But not only as a form of legal compliance, it turns out that there are several other benefits that KH pals can get by having business legality for business. What are these benefits or advantages? Check out the explanation in the following article.
What is Business Legality?
Before discussing further about its benefits for business, KH pals need to first understand what is meant by business legality. According to the Big Indonesian Dictionary (KBBI), legality is a state of legitimacy or validity which means actions or objects that are recognized for their existence as long as there are no regulating provisions. In other words, legality is a provision made for an act or object that will obtain validity from the party responsible for granting the permit. Legality speaks of an act or object that is recognized for its existence. So, if a company wants to be recognized for its business existence, it needs to take care of business legality. Business legality in business activities is important to have because it is an identity and identity that confirms a business so that later it is recognized by the community and the state. Business legality must be valid in the eyes of the law by being protected by various documents in accordance with laws and regulations.
What are the business legalities that businesses must fulfill?
In Indonesia itself, there are several mandatory business legality documents such as deed of establishment, Taxpayer Identification Number (NPWP), Business Identification Number (NIB), Company Domicile Certificate (SKDP), trademark, and other legality documents depending on each type of business. Below, we will explain one by one about the types of business legality documents:
Deed of Establishment
The deed of establishment is one of the documents drawn up by a Notary as the first step to establishing a company, either a Firm, CV, or PT. Basically, the deed of establishment contains the name of the business entity, capital, type of business field, and the place of residence of the business entity. In addition, the deed of establishment also contains the composition of the management, as well as the rights and obligations of each party in the business entity. This one document is important to have as a requirement when KH Friend wants to take care of other legalities.
NPWP of Business Entity
Another legality that must be owned is the Corporate NPWP. Just like an individual, a company also has an obligation to take care of its taxes, starting from calculating, paying, to reporting taxes. Not only that, NPWP is also one of the mandatory documents when you want to take care of other legalities such as company accounts, NIB, applying for capital to banks, and opportunities to get business projects from the government and the private sector.
NIB
The Business Identification Number (NIB) is a business identity used by individual businesses, legal entities, and business entities. NIB consists of 13 random digit numbers and is issued by an online institution called Online Single Submission (OSS) under the Ministry of Investment/BKPM. Apart from being an identity, NIB is also valid as an Import Identification Number (API), Company Registration Certificate (TDP), Trade Business License (SIUP), and Customs Access Rights.
SKDP
Not only NIB and NPWP, business actors are also required to arrange SKDP as a certificate stating that the company has a domicile at the address listed in the SKDP. The SKDP requirements for each domicile are different, for example, for the DKI Jakarta Region, based on Perda No. 1/2014, SKDP cannot be issued to PTs that use a home domicile address or that are not in an office zone. And keep in mind that SKDP can only be submitted if you already have a deed of establishment.
Trademark
When you decide to go into business, a trademark is an important thing that you should think about. Besides being able to differentiate your business from other businesses, a trademark also makes it easier for your business to be remembered and recognized by your target market and consumers. Now, this trademark must be registered with the DJKI Kemenkumham to protect the business legally and avoid misuse by irresponsible parties. Trademark registration in Indonesia is also first to file, which means that the party that registers its trademark the soonest will have the greatest ability to be recognized as the owner of the trademark.
What are the Benefits and Importance of Business Legality for Businesses?
Now, KH pals have understood some business legality documents that KH pals need to have to protect your business based on applicable law. So, what are the other benefits and the importance of business legality for the continuity of a business activity? Here is the explanation:
Legal Protection
As mentioned, business 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, the business is 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. Where, 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 frozen suddenly by the government.
Personal Assets Protected
Have you ever heard of a business going bankrupt and suffering huge losses, but the owner or shareholders can still 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 that personal assets will be used to pay debts when the business goes bankrupt and suffers losses.
Expanding Business to a Larger Scale
Along with the business journey, KH Friend must hope 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 pals need when they want to expand their business to a larger scale. Well, with business legality, access to capital loans becomes easier, either through banks or new investors.
Increased Business Credibility
Taking care of business legality also helps KH pals increase business credibility in the eyes of consumers, business partners, suppliers, investors, banks, and so on. Where with clear and legal business legality, your business will be more trusted and considered more professional. Target consumers will no longer hesitate to choose the products or services that Sobat KH offers. In addition, with high credibility, KH pals will certainly also find it easier to get several projects or tenders, both from the government and private companies.
Easier Share Sales
In addition to protecting the business, there are other benefits that KH pals can get when fulfilling business legality, especially if your business is a PT legal entity, namely the ease of selling or transferring shares to other parties. In addition, Sobat KH also does not need to bother if one day you intend to leave the business or if there are other parties who will enter as new shareholders. This is because Sobat KH can sell the company’s shares to other parties, especially if the business has grown and is of high value. Those are some of the importance and benefits that KH pals can get by pocketing business legality. Then, when should KH Friend take care of business legality? It’s good, before starting business activities. Where KH pals must first think about the type of business entity that is right for your business, then find out more information about what permits your business needs based on the business activities carried out.
READ ALSO: Risks of Owning a Business Without Legality
Without legality, KH pals will find it more difficult to run a business. In addition to a business that is not legally protected, the absence of business legality is also the same as closing access to develop. So before starting a business, don’t miss to fulfill business legality documents!
KH Contact
Well, to take care of business legality easily, quickly, and safely, KH pals can take advantage of the solutions offered by Kontrak Hukum. As a digital legal platform, we can help you to take care of all business legality documents needed for your business, starting from the establishment of business entities (PT, CV, PT Individual), making NIB, NPWP, and Micro and Small Business Permit (IUMK), to trademark registration to DJKI. For more information about services that suit your business needs, please visit this page. Or if you have questions about other legality documents, just consult with us at Tanya KH or via direct message (DM) to Instagram social media @kontrakhukum. Let’s fulfill business legality and feel the benefits! With KH, #semuajadiberes!
