What are the Requirements for Establishing a Foundation?

Overview of the Foundation

Did you know that in Indonesia, there are other business entities that are also in the form of legal entities other than PT? The legal entity in question is a foundation. Unlike other business entities, foundations may not be established with the aim of making a profit. The foundation as a business entity is only allowed to conduct business activities to support the achievement of its goals and objectives. This is because the foundation is a legal entity intended to achieve certain goals in the social, religious and humanitarian fields. So, the foundation can establish a business entity and/or participate in a business entity but not for profit but to achieve the purpose for which the foundation was established. A foundation can be established by one or more people by separating part of the founder’s wealth, as initial wealth. Foundations can also be formed by legal entities, foreigners, or through wills. To establish a foundation, the first thing that must be done by the founder is to order the name of the foundation at the Directorate General of AHU through the DITJEN AHU ONLINE – Foundation page. This is done to avoid any similarity with the name of the foundation that has already been registered and avoid a lawsuit from a third party. If it has been approved by the minister, then the proof of name reservation can be given to the notary to continue the process of establishing the foundation.

Foundation Articles of Association

According to Law No. 16 Year 2001, the establishment of a foundation is done with a notarial deed of the foundation and is made in the Indonesian language. The deed of establishment must contain the articles of association and other information deemed necessary. The foundation’s articles of association must contain at least:

Name and domicile;
Goals and objectives and activities to achieve those goals and objectives;
Period of establishment;
The amount of initial wealth separated from the founder’s personal wealth in the form of money or objects;
How wealth is acquired and used;
Procedures for the appointment, dismissal, and replacement of members of the Trustees, Management, and Supervisors;
Rights and obligations of members of the Trustees, Management, and Supervisors;
Procedures for organizing Foundation organ meetings;
Provisions regarding amendments to the Articles of Association;
Merger and dissolution of the Foundation;
Use of the remaining wealth of liquidation or distribution of the Foundation’s wealth after dissolution

The foundation will obtain the status of a legal entity after the foundation’s deed of establishment has been legalized by the Minister of Law and Human Rights. To obtain the validation, the founder or his/her proxy can submit an application to the minister through a notary who makes the deed of establishment of the foundation. The notary is obliged to submit a written request for validation to the minister within a period of no later than 10 days calculated from the date the deed of establishment of the foundation is signed.

Requirements for Establishing a Foundation

Quoted from the website of the Directorate General of AHU, there are documents that must be owned to submit an application to establish a foundation, including:

A copy of the deed of establishment of the foundation.
Copy of the foundation’s NPWP.
Copy of KTP and NPWP of the founders, trustees, supervisors, and management of the foundation.
A statement letter of domicile with the complete address of the foundation signed by the foundation’s management and acknowledged by the local village head or head of village.
Proof of deposit or bank statement on behalf of the foundation or a written statement from the founder containing information on the value of assets separated as initial wealth to establish the foundation.
Statement of incorporation regarding the validity of the initial assets.

Endorsement of the application shall be granted or denied within a period of no later than 30 days as from the date on which the application is received in full. In the event that consideration from relevant agencies is required, the endorsement shall be granted or denied within a period of no later than 14 days as from the date on which the response to the request for consideration from the relevant agencies is received. If within 14 days, the request for consideration is not received, the ratification shall be granted or refused within a period of no later than 30 days as from the date on which the request for consideration is submitted to the relevant agency. In the event that the application for ratification is rejected, the minister shall notify the applicant in writing, along with the reasons therefor, of the rejection of the ratification. If the application is accepted, the deed of establishment of the foundation that has been legalized as a legal entity must be announced in the Supplement to the State Gazette of the Republic of Indonesia. The announcement must be made by the minister within a period of no later than 14 days calculated from the date the deed of establishment of the foundation is legalized.

KH Contact

Well Friend KH, those are the requirements and ways to establish a Foundation. For KH Pals who need help to establish a foundation, Kontrak Hukum is ready to help KH Pals to process the foundation establishment permit. Kontrak Hukum guarantees that your data will be safe and protected. Most importantly, the process will be done quickly and efficiently by professional legal experts. For more information, you can directly visit the Business Entity Establishment page. If you have any questions regarding the establishment of a foundation or want to consult on other legal matters, do not hesitate to contact Kontrak Hukum at the Tanya KH bonded link!