How to Create a Company, from Requirements to Stages
The intention to set up a company is often hampered by the hesitation of not knowing what needs to be done. As a result, many give up before delving further into how to create a company.
However, for now you can be optimistic because visiting this page is already one step ahead in learning how to create a company. Let’s find out more about the requirements to the details of the steps!
What is a PT?
The term PT is often found at the front of a company’s name. If you are not familiar with the term, PT stands for limited liability company, which is a type of company that is protected by law and its capital is in the form of shares. Each shareholder is entitled to a portion of the company’s profits based on their investment in the business.
The position of each shareholder is also recognised by a General Meeting of Shareholders (GMS), where the company generally presents its annual report for approval. Important changes in the company’s structure are also communicated through the GMS, such as changes to the CEO and board members. Based on this information, performance evaluation and planning for future business continuity can be done. That is why GMS holds the highest authority in corporate governance.
This form of company can be a public company (Tbk) or a private company, depending on the policy of the management. If it is open, the business can obtain capital from anyone after conducting an initial public offering (IPO). Because it involves the wider public, a public company must report information related to the company’s activities to the public.
The profile and details of the business activities of a public company must also be easily accessible through the company’s website. In contrast, the shares of a closed PT are only held by a limited circle. Decisions and reports on business activities also only involve this group.
What if a PT loses money? Referring to UUPT Article 97 paragraph (2), company losses are borne by the board of directors if found negligent in carrying out their duties. However, all parties who invest in the company are also affected according to the amount of shares owned. If the company is not profitable, the value of the shares may fall and shareholders will not receive dividends. This is because dividends are the distribution of business profits in the form of cash and shares.
How to Set Up a PT?
The government has regulated how to create a company in the form of a PT through Law Number 40 Year 2007 on Limited Liability Companies. It states that the founders of a PT must consist of at least two people. Therefore, at least in one PT there is one director and one commissioner.
However, now PTs can be built by individuals and empowered by the government based on Government Regulation Number 7 of 2021 concerning the Ease, Protection, and Empowerment of Cooperatives and Micro, Small, and Medium Enterprises. This type of business entity is also known as an individual PT. The government set the policy to advance MSMEs in Indonesia.
Law No. 40/2007 also regulates the minimum capital to establish a PT. PT creators must at least channel IDR 50 million as the authorised capital, and at least 50 per cent of the issued and paid-up capital. However, now there is no minimum paid-up capital with the existence of Law Number 11 of 2020 or known as the Ciptaker Law. In fact, MSME founders get relief through government assistance.
Stages of making a PT
If you are ready to set up a PT, you can implement the following steps to create a limited liability company.
1. Prepare the identity of the founder
Before proceeding further, founders are required to prepare identity documents first. The personal documents consist of the Identity Cards (KTP) of the founders and management, the Family Card (KK) of the leaders, as well as the Taxpayer Identification Number (NPWP).
Then, some company documents will also be requested to find out details about the business. These include the PT’s name, the establishment’s purpose and objectives, capitalization, and management structure. In creating a PT name, some things to consider include copyright and the prohibition of using foreign languages.
2. Making a Deed of Establishment of a PT
Simply put, the way to make a PT Establishment Deed is by visiting a notary. This document contains basic information about the company, starting from the name and domicile, description of activities, capital, and list of management, to the procedures for using profits and distributing dividends.
Why do you need a notary? By being recognized by a notary, the agreement file can act as evidence when needed. Thus, the founders of the PT are directed to sign the agreement in the presence of a notary. In case of absence, the presence of the founder can be replaced using a power of attorney.
3. Waiting for PT authorization
Next, the Minister of Law and Human Rights (Menkumham) will officially legalize the PT after it has been submitted by a notary. The authorization form is given through a Decree (SK) consisting of two sheets. The first sheet contains the decision along with information about the company, such as the name, domicile, and the name and position of the notary.
Then, the second sheet is an attachment containing a description of the capital to the composition of the shareholders, board of commissioners, and directors. The financial information here consists of authorized and issued capital. Authorized capital is all the shares that can be issued by the company, while issued capital is the term for the money that has been taken by the founders or shareholders.
4. Taking care of domicile
The founder is also required to make a Company Domicile Certificate (SKDP) through local government services. However, some regions have eliminated the SKDP in order to simplify business licensing procedures. For example, the DKI Jakarta Regional Government has replaced the SKDP with a Business Identification Number (NIB) since 2019.
The replacement of SKDP with NIB signifies progress in business-building procedures. This is because it integrates between the Ministry of Law and Human Rights and the Director General of General Legal Administration (AHU). Everything is now brought together in the online single submission (OSS), an information technology-based licensing system.
5. Manage NPWP
In the previous regulation, PT founders needed to apply for a Trade Business License (SIUP), a Company Registration Certificate (TDP), as well as a Business Certificate (SKU). You are lucky because now all of these licensing documents are no longer valid. The central government has replaced them with NIB. So, the remaining step is to apply for the NPWP.
With the NPWP, the Director General of Taxes can identify the company in the context of taxation. Administering the NPWP can now be done online through ereg.pajak.go.id with an easy procedure. Documents to make an NPWP for a PT include the Deed of Establishment of the PT and the NPWP of the founder or manager. If you have fulfilled all the NPWP application processes, the card will be sent to the registered address within about a month after registration.