One of the important points that must be considered before starting a business and fulfilling the legality of a business entity is knowing the differences between PT and CV. Yes, this is because PT and CV are the most commonly encountered and common forms of business in Indonesia. Both clearly have differences. It takes careful consideration when Friend KH as a businessman must make a decision when starting a business. The differences between PT and CV can be seen from various aspects. Even as a form of business entity, both have different criteria. Then, what are the differences between PT and CV that business people should know? Well, for KH Pals who will establish a business and fulfill business legality, see the full explanation below!
Overview of PT and CV
Before you know what are the differences between PT and CV, it’s good to have a brief understanding of these two business entities. PT stands for Limited Liability Company. PT is a business entity protected by law with capital consisting of shares. In addition, PT is also formed based on an agreement and conducts business activities with authorized capital, all of which are divided into shares. Meanwhile, CV stands for commanditaire vennootschap. CV is a business entity formed from one or more people by lending money. In a CV, there is one who is in charge of active management and there is another party who acts as a capital provider. One of the differences between PT and CV is that the establishment of PT is regulated in Law (UU) No 40/2007 and is usually used for large-scale companies. Meanwhile, CVs are usually used by small and medium-sized businesses or MSMEs. Based on this explanation, there are several basic things that are the differences between PT and CV that you need to know. This is very important, because if KH Friend is wrong in establishing a business entity, it will lead to company legality issues.
What are the Differences between PT and CV?
As mentioned, knowing the differences between PT and CV before setting up a business is important and crucial. Apart from the abbreviations and definitions of both, the differences between PT and CV can also be seen from several aspects, ranging from the form of the company to its purpose.
Company Form
The first difference between PT and CV is the form of the company. PT is a legal entity, while CV is a non-legal entity. PT has specific rules in Law No. 40/2007 on Limited Liability Companies (PT Law). Meanwhile, CVs do not have legal rules governing their regulation. Because the legal status is different, the registration and legalization are also different. CV registration is considered easier than a PT. It should be noted that CV is a form of business inherited from the Dutch colonial era. Until now, CVs are widely used by MSME players.
Minimum Capital
The next difference between PT and CV can be seen from the minimum capital issued by the company. In Law No. 40/2007, it has been determined that the minimum capital to establish a PT is IDR 50 million. Meanwhile, to establish a business entity in the form of a CV, there is no minimum capital. However, the capital spent will affect the profit received in the future. The difference between PT and CV is very significant, isn’t it?
Founder and Ownership Status
Founders and ownership status are also one aspect of the difference between PT and CV that KH pals must know. If you want to establish a PT, a minimum of two people are needed, provided that one of the parties may be a foreign citizen as long as each party has a share. As for the establishment of a CV, a minimum of two people are also needed, but both must be Indonesian citizens. Where one party will act as an active ally, and the other as a passive ally. But please note, according to the 2020 Job Creation Law, the minimum of two founders in a PT does not apply to PTs whose shares are owned by the state, BUMN, BUMD, BUMDes, companies that manage stock exchanges, clearing and guarantee institutions, storage and settlement institutions, and other institutions in accordance with the Capital Market Law, or companies whose founders are MSMEs.
Company Name
The company name is also one of the striking aspects of the difference between PT and CV. For PT, after obtaining authorization from the Ministry of Law and Human Rights, KH Friend is required to include the phrase limited liability company or abbreviated as PT and must use a company name that has not been used by other companies. CV, on the other hand, has no specific rules for the company name. Therefore, sometimes there can be found the same CV business entity name.
Establishment Procedure
The next difference between PT and CV can be seen from the establishment procedure. PT requires authorization from the MOLHR, and requires a notary to represent the application to the MOLHR. After that, the MOLHR will issue a Decree stating that the PT is considered valid. As for a CV, its establishment does not require authorization from the MOLHR, and only needs to be registered through the Business Entity Administration System at the MOLHR. The MOLHR will then issue a registered certificate showing that the CV is valid and registered in the system.
Management
Management is also one aspect of the difference between PT and CV. PT management is carried out by directors who are elected based on the General Meeting of Shareholders (GMS). In addition, in a PT, shareholders also do not have the authority to manage and manage the PT unless they are appointed as members of the board of directors. Meanwhile, when establishing a CV, the management is divided into two groups, namely active allies and passive allies. Active allies are in charge of managing the company, while passive allies only act as capital depositors.
Objectives and Business Activities
The last difference between PT and CV is the purpose and business activities. A company in the form of a PT has a more flexible purpose in the field or business activities it carries out, including:
- PT includes business activities in trading, construction (contractors), mining, agriculture, automotive, and land transportation services for the printing industry;
- PTs with special business fields include business activities such as: press companies, film and video recording, private radio broadcasting, tourism, shipping, commercial air transportation, stevedoring companies, and so on.
Meanwhile, CVs have limitations in carrying out business activities. Business activities that can be carried out by CVs include: construction (contractors), industry, workshop, trade, agriculture, printing, and services. That is the explanation of the differences between PT and CV that you must know, starting from the form of the company to its purpose. In addition to showing comparison, KH Friend can also conclude the advantages and disadvantages of PT and CV from the explanation above.
KH Contact
If you already understand the difference between the two and consider which form of business entity is more suitable for your business, KH Friend can proceed to the next process, namely the establishment of the business entity itself. To do so, you can leave it to Kontrak Hukum! With a digitally integrated system and work done by professional services, Kontrak Hukum provides services for establishing business entities such as PT and CV, including the required legalities.
ALSO READ: This is the difference between CV and Firm!
No need to worry, because the prices offered for each service are affordable and the work is fast and practical. Are you curious about the establishment of PT and CV at Kontrak Hukum? Come on, visit this page If you are still confused about determining the establishment of a PT or CV, KH Friend can also consult first by clicking here.
