Perseroan Terbatas

Perseroan Terbatas (PT) refers to a form of business structure or legal entity type in Indonesia. PT is also known as a Limited Liability Company (LLC) in Indonesia and can be a publicly-listed entity or a privately-owned entity.

The capital of a PT company is divided into shares, and shareholders' responsibility is directly proportional to the number of shares held. In addition, since it is an LLC, the liabilities of shareholders are limited. Therefore, they are detached from the PT company's liabilities, and their assets are protected from the adverse impact of the financial crisis faced by the company.

Key Takeaways                                                               

• Perseroan Terbatas in Indonesia refers to a legal entity type that businesses can form to conduct business and build a revenue-generating entity in Indonesia. It is referred to as a PT or LLC.
• Generally, PT companies are categorized into Local PT companies and Foreign-owned PT PMA companies.
• If a company is accepted as a PT, the company name must start with "PT." The official name starting with PT is recorded in all permits, transactions, and licenses the company owns.

Perseroan Terbatas (PT) is a common form of legal entity describing a business in Indonesia. PT structure helps companies grow since it assures more legal certainty and simplifies international business engagement. Furthermore, all the companies incorporated as LLC (PT) should attach "PT" as a prefix to the company name. If it is a publicly listed company, then an add-on of TBK is needed at the end of the entity name.

Unilever Indonesia Tbk PT or PT Unilever Indonesia Tbk is an example of a PT company in Indonesia. It was founded on December 5, 1933, headquartered in Tangerang, Indonesia. In Indonesia, it comes under the consumer staple product industry. It produces, markets, and distributes fast-moving consumer goods  (FMCG) products like soaps, detergents, margarine, oil and dairy-based foods, tea-based beverages, ice cream, and cosmetics.

The common classification of PT is as a Local PT and Foreign-owned PT PMA company.

#1 - Local PT Company

It refers to the PT company, which is fully owned by Indonesian citizens only. It can contain one local director, two local shareholders, and one local commissioner. Suppose the amount of capital invested is below 500 million IDR. In that case, it is a small PT company. On the other hand, it is categorized as a medium if it falls between 500 million IDR and 10 billion IDR. PT companies under the large category will have an invested capital crossing 10 billion IDR. 

#2 - Foreign-owned PT PMA company

It refers to the PT business structure allowing foreign ownership. It can be formed by having complete foreign entity ownership, unlike Local PT companies mandating local shareholders. The sector the company follows should not be on a negative investment list for having this type. These companies are formed by an invested capital of 10 billion IDR or above.

There are other sets of usages pertaining to the types of Perseroan Terbatas.

• The domestic PT conducts business in Indonesia, has Indonesian citizens as shareholders, and uses domestic capital.
• Foreign PT refers to the foreign-owned PT in Indonesia subjected to laws in the parent country and Indonesia.
• Open PT refers to the LLC offering shares to the public.
• Closed PT resembles a private company offering private shares.
• Individual PT is the one with a single owner.
• Finally, the general public PT offers shares to any entity.

For a Perseroan Terbatas company to be lawfully established, there are specific requirements that a Limited Liability Company must adhere to – 

It starts with the capital requirement, and it falls in the following ranges:

• "Small" PT company: Above 50 million IDR to 500 million IDR
• "Medium" PT company: Above 500 million IDR to 10 billion IDR
• "Large" PT company: Above 10 billion IDR

Important documents to be prepared are:

• Prepare the framework of the Articles of Association of the LLC as the primary data. 
• Make the deed of the establishment to the Notary, containing
  • Company name (minimum three name options) 
  • Name of the company's founders 
  • The amount of the authorized capital of the company 
  • Place, company position, and complete address 
  • Data of Board of Directors and Commissioners 
  • Purpose and objectives of the company 
  • Shareholder data and amount issued and paid-up capital 
  • The TAX ID number of the Board of Directors and Commissioners 
  • The identity card of the company's founders 
  • Power of attorney if the establishment of the company is to be authorized

Some of the effective procedures to be followed are:

• The founder or founders of the entity must apply for establishing an LLC to the Notary by bringing the required documents and submitting the application.
• The Notary will make minutes, including a deed of incorporation for getting it signed by the founders. 
• After receiving the signed documents, an Authentic Deed of Limited Liability Company Certificate will be issued, signed, and stamped by the Notary.
• As evidence of the LLC, the deed of the establishment must contain written day, date, month, and year. 
• The Notary will submit the relevant documents to the Minister to complete the legalization process.
• After issuing the Decree of the Minister of Law and Human Rights of the Republic of Indonesia, the LLC will get the legal entity status. 
• Once the Deed of Establishment and Ratification of the Company's Articles of Association is completed, the business has been established in the Limited Liability Company (PT) form.