Selecting the right name for your PT (limited liability company) is the initial requirement to start a business. While it may seem simple, many people struggle to find the appropriate name for their company in practice. Unlike CVs, where there are no restrictions on naming, some encounter difficulties in finding a suitable name. Choosing an inappropriate name can lead to issues in the smooth operation of the business. Here is a guide to creating a company name to avoid such problems:
1. The company name must consist of a minimum of 3 Indonesian words
The company name should consist of at least 3 syllables in the Indonesian language. This is done to differentiate local companies from those with foreign capital. According to Article 11 of Regulation PP 43/2011, “A company whose entire shares are owned by Indonesian citizens or Indonesian legal entities must use the Company Name in the Indonesian language.” The name should also use Latin letters and not include numbers or combinations of letters that form words.
2. The company name must not contradict public order or morality
The company name must adhere to prevailing ethical standards. Therefore, the use of names containing issues related to ethnicity, religion, or hatred and not in accordance with applicable norms is not allowed under Article 16, paragraph (1) of the Limited Liability Company Law.
3. The company name must reflect the purpose or business field of the company
Article 5, paragraphs (1) g and h of Regulation No. 43 of 2011 state that the company name must reflect the business field it engages in. In summary, the use of the company’s business field should not contradict the name used. There are cases where the use of a name can limit the business field that can be pursued. For example, a company with the word “Service” in its name can only operate in the service sector. Therefore, it is advisable to use a name that aligns with the intended business field.
4. The company name must not be identical to an existing company name
A Limited Liability Company (PT) name must not be the same as another, even if their business fields and domiciles are different. This is prohibited by regulations. The prohibition is outlined in Regulation No. 43 of 2011 regarding the Procedures for Submission and Use of Limited Liability Company Names.
In Article 5, paragraph (1) b of Regulation PP 43/2011, it is stated that:
“(1) The proposed company name must meet the requirements:
1. has not been legally used by another company or is not fundamentally similar to another company’s name.“
If there is a similarity between the registered PT name and the name of an already registered PT, the Ministry of Law and Human Rights will reject the registration according to Article 3, paragraph (1) of Regulation PP 43/2011.
If all the above conditions are met, the proposed company name will be accepted and can proceed to the next stage.
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