In the business world, choosing the type of business entity is one of the most important decisions you have to make when starting a business.
One of the favorite choices for entrepreneurs is the Commanditaire Vennootschap or CV.
Maybe you’ve heard of CVs, but do you know what a CV is in the context of company and how does it work?
Let’s dig deeper into this business entity with us!
Definition of CV In Context Company?
CV or Commanditaire Vennootschap is a form of business entity that is often used in Indonesia.
A CV is a form of cooperation by two or more parties, where one party acts as an active ally (manager) and the other party as a passive ally (capital contributor).
In this case, the operation of a CV is regulated by the Commercial Code (KUHD) Articles 19-21.
- KUHD Article 19-21: A CV is a form of commoditized partnership, in which there are two types of allies, namely active allies and passive allies.
- KUHD Article 19: Explains that in a limited partnership, passive allies only deposit capital and do not participate in the management of the company, while active allies are fully responsible for the management.
- KUHD Article 21: Active allies are fully responsible for the company’s liabilities, meaning that if the company suffers a loss, active allies are obliged to bear it up to their personal assets if necessary.
In a CV, active allies have full responsibility for the running of the business and legal obligations of the company.
Meanwhile, passive allies only deposit capital and do not interfere in the day-to-day management.
Even so, the profits obtained by the two allies are still divided based on the agreement made at the beginning of the CV formation.
Advantages of CV Company
After knowing definition of CVdefinition, let’s now move on to its advantages as a form of company.
Mengapa banyak pengusaha yang memilih mendirikan CV daripada jenis badan usaha lainnya?
Inilah alasannya!
1. Relatively Smaller Starting Capital
Establishing a CV does not require a large capital base like a PT.
This is certainly a solution for entrepreneurs who want to start a business with limited capital.
2. Easier and Faster Establishment Process
The process of establishing a CV is relatively simpler compared to a PT.
You don’t need to register the company with the Stock Exchange or fulfill more complex requirements as in the establishment of a PT.
3. Flexibility in Management
Because active allies have the freedom to manage the company, the decision-making process in a CV tends to be faster and more flexible than other business entities that involve multiple shareholders.
4. Lower Operating Costs
CVs are not required to conduct regular financial statement audits like PTs, so the company’s operational costs can be reduced.
How a CV Company Works
Basically, the way a CV company works is quite simple.
CVs have two types of allies: active allies and passive allies.
Active allies are responsible for the day-to-day running of the business, while passive allies only provide capital.
Operationally, active allies will create and execute policies to run the company.
They are also in charge of finances, operations, and other strategic decisions.
In contrast, passive allies only act as funders and do not interfere in management.
Despite not participating in management, passive allies still get a share of the profits according to the agreement.
Read also: Get to know Employee Share Ownership Agreement, here are the rules!
What is the Difference between CV, Individual PT, and Firm?
Maybe you are still confused about the difference between the definition of a CV company, individual companies, and firms.
Let’s discuss them one by one to make it clearer!
Let’s see!
CV (Commanditaire Vennootschap)
A CV is a form of company that consists of active allies and passive allies.
Active allies run the business and take full responsibility, while passive allies only provide capital.
A good example of a CV company is CV Roti Djoeang, which produces traditional bread.
This CV is run by a family in Yogyakarta, where one family member actively manages the operations, while the other members act as capital contributors.
PT Perangan (Individual Limited Liability Company)
Individual PT is a form of business entity with capital divided into shares. In Indonesia, individual PTs are relatively new and examples can be found in small and medium-sized enterprises.
An example is PT Sampah Muda Indonesia, which is engaged in waste management. The founders of this company are liable only to the extent of the capital they invest, but with strong legal protection as a business entity in the form of a PT.
Firm
A firm is a form of business entity in which all members (allies) are active and jointly run the company.
Each member of the firm has full responsibility for the company’s obligations.
An example of a firm is the Law Firm of Lubis, Santosa & Maramis in Jakarta which is one of the well-known law firms in Indonesia.
The firm consists of several lawyers who are directly involved in operations and decision-making, and share responsibilities and profits together.
Read also: Knowing PKP and Non PKP Companies, Which is More Profitable?
Can a CV become a PT?
Many entrepreneurs after successfully running a CV then wonder, can a CV turn into a PT?
The answer is yes!
A CV can be transformed into a PT through a legal process called business entity conversion.
This step is usually taken when the company wants to expand its business scale and needs a stronger legal structure such as a PT.
Conversion from CV to PT requires several important documents and legal procedures, including changes to the company deed, re-registration with the Ministry of Law and Human Rights, and adjustment of the authorized capital in accordance with the provisions of PT establishment.
What are the requirements for making a CV?
If you are interested in setting up a CV company, there are several requirements that must be met, including:
1. Has Active and Passive Allies
2. Deed of Establishment before a Notary
3. Company Name
One of the important requirements in establishing a CV is determining the name of the company.
You have to choose your company name carefully because there are some rules attached to it.
Here are some provisions regarding company names:
- Name must be unique and unused
Based on the Regulation of the Minister of Law and Human Rights of the Republic of Indonesia Number 17 of 2018 concerning Registration of CVs, Firms, and Civil Partnerships, the name of the CV must be unique and cannot be the same as the name of another company that has already been registered.
Therefore, before deciding on a name, it is important to ensure that the name has not been used by another party.
In this case, you can visit the official website of the Directorate General of Public Law Administration (AHU) on the ahu.go.id page to check the company name that has been registered.
- Does Not Contain Words or Phrases Contrary to Public Order or Decency
The company name should not contain words that may cause negative perceptions or violate the norms prevailing in society.
The use of names that contain vulgar, provocative, or insulting elements is prohibited and will be rejected by the authorities.
- Name Cannot Use Numbers or Punctuation Marks Entirely
CV names should not consist entirely of numbers or punctuation.
This is done so that the name is easy to remember and has differentiating power.
4. Company Domicile Certificate
5. Taxpayer Identification Number (NPWP)
6. Trading Business License (SIUP)
After knowing the requirements, you just need to register your CV at the local District Court by bringing the above documents.
Once the process is complete, your CV can start operating legally.
So, that’s what the definition of a CV-shaped company to the terms of establishment.
How, have you understood?
If you are still curious, you can consult for free at Ask KH!
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KH Contact
Understanding and choosing the right type of business entity is crucial to the success of your business. Commanditaire Vennootschap (CV) is the choice of many entrepreneurs because of its convenience and flexibility. For KH Pals who need assistance in establishing a CV or tax-related consultations, Kontrak Hukum is ready to help.
If you still have questions, you can also get a free consultation from KH. Ask KH or send a direct message (DM) to Instagram @kontrakhukum.
