Article 109 paragraph 1 of the Job Creation Law Regulation changes Article 1 paragraph 1 of the Company Law, stating that a Limited Liability Company (PT) is a legal entity that constitutes a partnership of capital established based on an agreement and conducts business activities with a capital base consisting of shares or an individual legal entity that meets the criteria for micro and small enterprises as regulated in the legislation concerning micro and small enterprises.

Article 2 of Regulation of the Minister of Law and Human Rights 21/2021 states that the types of Limited Liability Companies (PT) consist of:

1. Capital partnership PT
2. Individual PT

The requirements for establishing a sole proprietorship and a partnership limited liability company are based on the scale of the business. The criteria for this scale of business are determined by the capital or annual sales, as stated in Article 35 of Government Regulation 7/2021 as follows:

Criteria	Micro Business	Small Business	Medium Enterprises
Business capital	A maximum of IDR 1 billion, excluding the land and building of the business premises.	>Rp1 billion to a maximum of Rp5 billion does not include the land and building where the business operates.	>5 billion to a maximum of Rp10 billion excluding land and buildings for the business premises.
Annual sales	A maximum of 2 billion rupiah.	>From 2 billion to 15 billion rupiah.	>Rp15 miliar s.d. Rp50 miliar.

REQUIREMENTS FOR ESTABLISHING A SOLE PROPRIETORSHIP COMPANY

The requirements that must be met by the founders of a Limited Liability Company (PT) or individual PT according to the provisions of Government Regulation 8/2021 are:

1. An individual PT can only be established by Indonesian citizens who meet the establishment requirements in Indonesian.
2. Indonesian citizens must be at least 17 years old and possess legal capacity.
3. One shareholder;
4. It is only permitted to establish an individual PT once within a period of one year.

To establish a sole proprietorship limited liability company (PT), a notarial deed is not required. However, the requirements for establishing a micro and small business limited liability company (PT UMK) or a sole proprietorship PT still involve a basic capital, as fundamentally, a PT must have basic capital. The basic capital of a PT is determined based on the decision of the PT founders, according to Article 109 paragraph 3 of the Job Creation Law, which amends Article 32 paragraph (2) of the Company Law. At least 25% of the basic capital must be paid in, which is evidenced by valid proof of payment. This payment must be submitted electronically to the Minister of Law and Human Rights within 60 days from the date of filing the establishment statement of the PT.

In addition, there are facilities available to establish an individual PT. Article 109 paragraph 5 of the Job Creation Perppu now includes Article 153A paragraph (2) of the Company Law, which allows for the establishment of individual limited liability companies by simply creating a declaration of establishment in Indonesian. The letter must include the purpose and objectives of the limited liability company, business activities, authorized capital, and other information related to the establishment of the company.

The matters that must be included in the establishment statement are further regulated in Article 7 paragraph (2) of Government Regulation 8/2021, which includes:

1. The name and location of the individual limited liability company (PT);
2. The duration of establishment;
3. The purpose and objectives as well as business activities;
4. The amount of authorized capital, issued capital, and paid-up capital;
5. The nominal value and number of shares;
6. The address of the individual limited liability company; and
7. The full name, place and date of birth, occupation, residence, population identification number (NIK), and taxpayer identification number (NPWP) of the founder, who is also the director and shareholder of the individual limited liability company.

In accordance with Article 14 of the Minister of Law and Human Rights Regulation 21/2021, the declaration of establishment of a limited liability company (PT) is registered electronically with the Minister of Law and Human Rights as a requirement for the establishment of the PT. Subsequently, the Minister will issue an electronic certificate of establishment declaration. The applicant can also print the statement of establishment and certificate using F4/folio white paper.

TERMS AND CONDITIONS FOR ESTABLISHING A LIMITED PARTNERSHIP COMPANY

The provisions or requirements for the establishment of a capital partnership company or a regular limited liability company are outlined in the law, specifically Article 109 number 2 of the Job Creation Perppu, which amends Article 7 of the Company Law as follows:

1. A limited liability company (PT) is established by two or more individuals through a notarial deed in Indonesian;
2. At the time of the establishment of the PT, all founders must participate in the shares;
3. After being registered with the Minister of Law and Human Rights and obtaining proof of registration, the PT acquires legal entity status;
4. After the PT becomes a legal entity and has more than two shareholders, they must transfer some of their shares to others or issue new shares to others within a period of 6 months.

The amount of capital required for the establishment of a sole proprietorship and a partnership limited by shares is the same.

REQUIREMENTS FOR ESTABLISHING A FOREIGN INVESTMENT COMPANY (PT PMA)

PMA is an investment activity to conduct business in the territory of the Republic of Indonesia carried out by foreign investors, whether using entirely foreign capital or in partnership with domestic investment. In this case, foreign investors can be defined as individuals, companies, or foreign governments that invest capital in the territory of Indonesia. In foreign investment, there are requirements that must be met, including:

1. PMA must be in the form of a limited liability company (PT) based on Indonesian law and located within the territory of the Republic of Indonesia (unless otherwise specified by law);
2. Can only engage in large-scale business activities;
3. Investment value must be greater than IDR 10 billion;
4. The paid-up capital must be at least IDR 10 billion.

The type of limited liability company (PT) established by foreign investment (PMA) is a capital partnership company, so the requirements for establishing a PMA company include the provisions in the Company Law and its amendments.

Legal Basis:

1. Law Number 25 of 2007 concerning Investment;
2. Law Number 40 of 2007 concerning Limited Liability Companies;
3. Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation;
4. Law Number 6 of 2023 concerning the Establishment of Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation into Law;
5. Government Regulation Number 7 of 2021 concerning the Facilitation, Protection, and Empowerment of Cooperatives and Micro, Small, and Medium Enterprises;
6. Government Regulation Number 8 of 2021 concerning the Basic Capital of Companies and the Registration of Establishment, Changes, and Dissolution of Companies that Meet the Criteria for Micro and Small Enterprises;
7. Presidential Regulation Number 10 of 2021 concerning Business Fields for Investment;
8. Regulation of the Minister of Law and Human Rights Number 21 of 2021 concerning the Requirements and Procedures for the Registration of Establishment, Changes, and Dissolution of Limited Liability Companies;
9. Regulation of the Investment Coordinating Board Number 4 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities.

Reference:

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