If you’ve ever thought about starting a business in Indonesia, you may have come across the terms “PT Perorangan” and “PT Biasa.” But what exactly is the difference between the two? Are there any specific advantages to choosing one over the other? This article will help you understand these two types of business entities in more depth so that you can make a more informed decision that suits your business needs. Let’s begin with a basic explanation.
Also Read: Definition of Limited Liability Company (PT), Types, and Examples
Difference in Definition
Sole Proprietorship (PT Perorangan) is a new type of Limited Liability Company that can be established by just one person. It is a simpler form of PT compared to a regular Limited Liability Company, which usually requires at least two or more founders. Sole Proprietorship PT was introduced to facilitate micro, small, and medium enterprises (MSMEs) in forming a legal entity without needing multiple people.
On the other hand, a Regular PT is a well-known form of PT in Indonesia. To establish a Regular PT, a minimum of two founders is required, and each founder holds shares in the company. Regular PTs are often used by medium to large-scale companies because they offer more flexibility in terms of ownership structure and management.
Also Read: Advantages of a Limited Liability Company (PT)
Difference in Establishment Process
Establishing a Sole Proprietorship PT is generally simpler and faster compared to a Regular PT. You only need to register the company through the OSS (Online Single Submission) system with basic documents such as your ID card (KTP) and tax number (NPWP). A Sole Proprietorship PT does not require a notarial deed, which makes the cost more affordable.
Establishing a Regular PT requires more documentation and time. In addition to registration through OSS, you must also prepare a deed of establishment certified by a notary. The organizational structure of a Regular PT is also more complex, as it involves at least two shareholders and company management.
Also Read: Public Companies (Perum): Definition, Characteristics, and Examples
Tax and Legal Aspects
Both Sole Proprietorship and Regular Limited Liability Companies are subject to the same tax rules, specifically corporate income tax (PPh). However, because a Regular PT has more shareholders, the distribution of dividends and tax reporting can be more complex. Meanwhile, tax reporting for Sole Proprietorship PTs is simpler as it only involves one person.
The choice between a Sole Proprietorship and a Regular Limited Liability Company depends on your business needs and scale. If you are starting a small business and do not plan to expand soon, a Sole Proprietorship PT may be a more practical choice. However, if you are planning for rapid growth and need a more flexible structure, a Regular PT might be more suitable.
Before deciding on the type of PT to establish, you may want to consider the following:
- Review the scale of your business: If your business is still small, a Sole Proprietorship PT might be more appropriate.
- Consider long-term needs: If you plan to expand, a Regular PT offers more flexibility.
- Consult with a legal expert: To ensure you’re choosing the right type of PT, it’s always a good idea to consult with a legal expert or notary.
Also Read: Difference Between Public and Private Limited Companies: What’s the Difference?
Understanding the differences between Sole Proprietorship PTs and Regular PTs is essential before deciding on the right business entity for your company. A Sole Proprietorship PT offers simplicity and lower costs, while a Regular PT provides flexibility and greater growth potential. The best choice depends on your business vision for the future.
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