Commanditaire Vennootschap (CV): Definition, How to Establish

Want to establish a business entity in the form of a Commanditaire Vennootschap (CV)? What is a CV company? Here’s what you need to know.

Understanding CV

Also known as Commanditaire Vennootschap, the definition of CV is a non-legal entity business that has one or more general partners and limited partners, according to the Draft Law on Individual Business and Non-Legal Entity Business Article 1 paragraph 5.

The limited partners are responsible for providing goods, services, or money as the capital of the CV but are not responsible for the sustainability of the CV itself. Meanwhile, the general partners are fully responsible for the existence of the CV, as stated in the Commercial Code (KUH) Article 19.

Read Also: What is TDP (Company Registration Certificate)?

Capital Owners in CV

From this definition, there is an explanation regarding the capital owners in the business entity in the form of Commanditaire Vennootschap, namely:

  • General Partner

    The general partner referred to as an active partner in the limited partnership is the capital owner responsible for the operational activities of the company and is fully entitled to enter into employment agreements with third parties.

  • Limited Partner

    The limited partner referred to as a passive partner is only responsible for providing income as capital to the partnership. This partner is not responsible for the operational activities of the company.

Procedure for Establishing CV

Basically, the Commercial Code does not explain the regulations regarding the process of establishing a CV, so this business entity can be established only with an oral agreement or agreement from one party, as stated in Commercial Code Article 22.

However, the practice in Indonesia requires the establishment of a CV by creating a founding deed by a notary. The deed is then registered at the local District Court office and is written and announced in the State Gazette Supplement, similar to establishing a firm business entity.

Types of CV Business Entities

Similar to PT business entities, Commanditaire Vennootschap companies are also divided into several types, namely:

  • CV with Shares

This type of CV has the characteristic of issuing shares that can be taken by each general partner and limited partner. However, these shares cannot be traded. It is not easy to withdraw the capital that has been deposited, so the issuance of shares aims to reduce the risk of frozen capital.

  • Pure CV

Pure CV is the simplest type of Commanditaire Vennootschap. In its structure, this CV only has one general partner and several parties acting as limited partners.

  • Mixed CV

Mixed-form CV usually occurs in a firm business entity that requires additional capital injection. The party willing to provide additional capital will act as a limited partner, and the firm that will receive additional capital will act as a general partner.

Advantages and Disadvantages of CV

Before establishing a Commanditaire Vennootschap business entity, be aware of its strengths and weaknesses. Some advantages of a CV include:

  • Easier to establish compared to PT.
  • Easy to obtain capital because it is more trusted by banks.
  • Easier to grow because it can be managed by anyone, including professionals with very competent business skills.
  • Every risk and obstacle that arises is a shared responsibility.

On the other hand, the weaknesses of a CV include:

  • Difficulty in withdrawing deposited capital or income.
  • The possibility of conflicts between partners is very high.
  • The operation and smooth running of the CV are in the hands of the active partner. This means the company’s sustainability is very uncertain.

Termination of CV Business Entity

Basically, a business entity in the form of a CV is included in the type of civil partnership. Therefore, the termination of the operations of a CV business entity is not much different from a civil partnership, regulated in the Civil Code (KUHP) Articles 1646 to 1652.

One of the articles in the Civil Code, namely Article 1646, states that there are at least 4 (four) reasons for a CV to be declared terminated, namely:

  • Expiration of the partnership agreement period.
  • Becomes the will of the partner.
  • Destruction of goods or resolution of the principal problems of the partnership.
  • The death of one of the partners or formal bankruptcy.

Although the definition of CV is not a legal entity, this business entity is still subject to taxation. Therefore, the owner must register the CV with the tax office to obtain a Taxpayer Identification Number (NPWP). If you encounter difficulties in establishing a CV, you can contact Hopefully, this is helpful.