Establishing a Limited Liability Company (PT) in Indonesia involves more than just selecting a business name and operational location. One of the key aspects is capital. The capital of a PT serves as the financial foundation of the company and demonstrates the founders’ commitment to running the business. So, what do we need to understand about PT capital? Let’s dive in!
Also Read: Definition of Limited Liability Company (PT)
Legal Foundations of PT Capital in Indonesia
To establish a PT, one must refer to the applicable legal foundations, which include:
- Law No. 40 of 2007 on Limited Liability Companies (UUPT): This law regulates all aspects of establishing, managing, and dissolving PTs, including capital-related provisions.
- Government Regulation (PP) No. 8 of 2021: This regulation facilitates ease of doing business, protection, and empowerment of MSMEs, including removing minimum capital requirements for certain PTs.
Also Read: How to Establish a PT: Step-by-Step Guide
Types of PT Capital
PT capital is categorized into three main types that founders should understand:
Authorized Capital
Authorized capital refers to the total amount of capital recorded in the Articles of Association (AD) of the PT. This represents the maximum capacity a company can hold.
Issued Capital
From the authorized capital, a portion must be issued to shareholders, reflecting their commitment to the company.
Paid-Up Capital
Paid-up capital is the portion of issued capital that has been fully paid by shareholders to the PT.
Also Read: Challenges of PT Structure: Understanding the Risks
Increasing PT Capital
When a company wants to grow, it often needs additional capital. The process involves:
- Amending the Articles of Association (AD): This is usually done through a General Meeting of Shareholders (GMS).
- Registering Changes with the Ministry of Law and Human Rights: All changes in capital must be officially recorded.
Also Read: PT Establishment Costs: A Guide for Entrepreneurs
Decreasing PT Capital
Decreasing a PT’s capital is also possible but involves a more complex process, such as:
- Gaining GMS Approval: All shareholders must agree to the changes.
- Involving a Public Accountant: An audit is required to ensure the company can meet its obligations after reducing capital.
Also Read: What is an Empty PT: Definition, Characteristics, and Purpose
What is the Minimum Capital to Establish a PT?
Under PP No. 8 of 2021, the minimum capital for establishing a PT is now determined by the founders’ agreement. For MSMEs, the capital can start from a small amount. For regular PTs, the initial recommended capital is typically at least IDR 50 million.
Also Read: PT Establishment Requirements You Must Know
Understanding the types of capital and the legal regulations governing PTs is the first step to achieving business success. With well-managed capital, companies can better navigate future challenges and opportunities.
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FAQs
- What is authorized capital in a Limited Liability Company?
Authorized capital is the total capital recorded in the PT’s Articles of Association, including all shares that can be issued. - How to increase paid-up capital?
Shareholders need to contribute additional capital as agreed upon through the GMS. - Is there a minimum capital requirement for small PTs?
There is no minimum requirement for MSMEs under the latest regulations, as long as it aligns with the founders’ agreement. - What are the risks of insufficient capital in a PT?
A PT may fail to meet legal requirements and struggle to attract investors. - How to process PT capital changes with the Ministry of Law and Human Rights?
You need to submit updated documents and undergo a verification process.
