What is LLC in Indonesia?

Corporate Secretary Service – Perseroan Terbatas (PT) or Limited Liability Company (LLC) is one of the most popular forms of business entity in Indonesia, especially for those who want to run a business on a larger scale. With the benefits it offers, such as limited liability for shareholders and the ability to raise capital from the public, PT is the first choice of many entrepreneurs.

However, before deciding to set up a PT, it is important to have an in-depth understanding of the features and characteristics of this business entity in order to maximize the benefits it offers.

1. Capital Divided into Shares

One of the distinctive features of a Limited Liability Company (PT) is that its capital is divided into shares. Each shareholder has a share of ownership in the company according to the number of shares they own. This division of capital into shares allows the company to more easily raise funds from various sources, as well as providing flexibility for shareholders in managing their investments.

In addition, the shares are tradable, so shareholders have the option to sell their holdings at any time, depending on the market value and desired investment strategy.

2. Limited Liability

Limited liability is one of the main advantages of a Limited Liability Company (PT). In a PT, shareholders’ liability for the company’s obligations is limited to the amount of shares they own. This means that if the company suffers a loss or goes bankrupt, shareholders will not lose more than the value of their investment in the shares.

This provides legal protection for shareholders’ personal assets, so they don’t have to worry about their personal assets being seized to pay off the company’s debts. This limited liability makes PT a safe and attractive option for investors and entrepreneurs.

3. Has a Clear Organizational Structure

A Limited Liability Company (PT) has a clear and structured organizational structure, which is one of its distinctive features. This structure generally consists of three main components: General Meeting of Shareholders (GMS), Board of Directors, and Board of Commissioners. The GMS serves as the highest authority in making strategic company decisions, such as changes to the articles of association or the appointment of directors. The Board of Directors is responsible for the day-to-day operations of the company and ensuring that the company runs in accordance with its stated objectives.

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Meanwhile, the Board of Commissioners is tasked with overseeing the performance of the directors and providing advice to safeguard the interests of shareholders. This clear structure allows for an efficient division of tasks and responsibilities, allowing the company to operate more effectively and purposefully.

4. Established Under the Law

Every Limited Liability Company (PT) must be established based on the applicable laws in Indonesia. The process of establishing a PT starts with the drafting of a deed of establishment that is prepared by a notary and contains important information about the company, such as the company name, authorized capital, shareholder composition, and business objectives. This deed of establishment must be authorized by the Ministry of Law and Human Rights so that the company has the status of a legal entity.

After obtaining authorization, the PT must register itself with various relevant agencies, such as the Directorate General of Taxes and the Industry and Trade Office. Compliance with this legal process is crucial as it gives the PT legal legitimacy and ensures that the company is officially recognized by the state.

5. Can Raise Capital from the Public

One of the advantages of a Limited Liability Company (PT) is its ability to raise capital from the public, especially if the company has gone public or is listed on the stock exchange. By selling shares to the public, a PT can raise significant additional funds to support business expansion, product innovation, or strengthen the company’s financial position.

This process also allows the general public to invest in the company, thereby broadening the shareholding base. The ability to raise capital from the public gives a PT greater financial flexibility and opens up wider growth opportunities compared to other forms of business that rely solely on the capital of its founders or owners.

Don’t worry about developing your business by setting up a company in Indonesia, because Portcorp is here as a solution for your business. Portcorp is your comprehensive corporate secretary service in Indonesia. With our presence, you can get a dedicated company secretary to support you to what you need. Our company secretaries will track deadlines and file paperwork so your business keeps running smoothly. Contact us now on +6221-5020-8090 for your business succeed in the future!