A General Overview of Indonesian Company Law

A General Overview of Indonesian Company Law

Corporate Law Series - Part 1

Background

The Mechanism of Company Law in Indonesia

In the practice of corporate law in Indonesia, a company can be divided into two types, which are the Legal Entity Businesses and Non-Legal Entity Businesses (or commonly known as Business Entity).

A legal entity recognises the separation of assets between its founders and the established entity, while a business entity does not. Establishing a legal entity requires the approval from several government bodies/agencies, while establishing a business entity are less bureaucratic procedures.

In the Indonesian economic system the most commonly used as business vehicles is a business entity in the form of a small business or an individual business entity.

Regulations governing the business entity in the form of a small business or an individual business entity can be found in the Code of Commerce (Kitab Undang-Undang Hukum Dagang/KUHD Wetboek van Koophandel/WvK) and the Civil Code (Kitab Undang-Undang Hukum Perdata/KUHPerdata Burgerlijk Wetboek/BW) inherited from Dutch colonialism, which are applied in Indonesia based on the principle of Concordance and most of its legal provisions still prevail.


CRUCIAL LEGAL TERMS OF INDONESIAN COMPANY LAW

CRUCIAL LEGAL TERMS OF INDONESIAN COMPANY LAW

According to the author, the definition of Company Law is the whole legal rule in various laws and regulations governing the systematics and administration of a company, starting from the incorporation process, legal relationship between the founders and with third parties, until the completion of the procedures for disputes arising in the implementation.
The Law of Limited Liability Companies (LLC)

The Law of Limited Liability Companies (LLC)

Limited Liability Company, hereinafter referred to as the Company, means a legal entity constitutes a capital alliance, established based on an agreement, in order to conduct business activities with the Companys Authorized Capital divided into shares and which satisfies the requirements as stipulated in this Law, and its implementing regulations.
THE MOST COMMON FORMS OF BUSINESSES IN INDONESIA

THE MOST COMMON FORMS OF BUSINESSES IN INDONESIA

PT is the most commonly used as a business vehicles in Indonesia, while CV and Individual Businesses are the most commonly used business entities in Indonesia.
INCORPORATION OF LOCAL PT / LLC IN INDONESIA

INCORPORATION OF LOCAL PT / LLC IN INDONESIA

This section describes the whole process of the incorporation of a PT in Indonesia. Starting from the execution of its DoE and Articles of Association through a notarial deed in Bahasa Indonesia until the completion of all required and relevant business licenses.

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Disclaimer

Disclaimer
"This Article was produced by DHP Lawyers for understanding Indonesian law only and does not constitute an official translation published by the Indonesian Government.

This article was not intended to be used as advice and/or opinions and/or legal references, and no action should be taken as regards the reliability of any of the information contained herein without first seeking guidance from professional services.

We have made every effort to ensure the accuracy and completeness of the information that is contained within this Memorandum, however, we are not responsible for any errors, omissions and/or mistakes that occur in the source text.

DHP Lawyers reserves its right to change, modify, add, or remove any errors or omissions without any prior notification being given."

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  30 Mei 2019

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