Publicly Listed Company (PT Tbk): Definition, Characteristics, and Requirements

A Publicly Listed Company, commonly referred to as Tbk, is a type of company where shares are publicly owned.

Generally known as PT Tbk, this company’s shares can be purchased by the general public on the stock exchange. A Tbk company is a business entity that offers shares to the public to increase capital and expand its business.

Daftar Isi hide

1) Definition of Tbk Company

2) Characteristics of a Tbk Company

3) Requirements to Become a Publicly Listed Company (PT Tbk)

4) Benefits of Becoming a Tbk Company

5) Drawbacks of Becoming a Tbk Company

6) How to Become a Tbk Company

7) Differences Between PT Tbk and Private PT

8) PT Formation Services from vOffice

Definition of Tbk Company

PT Tbk: Definition, Characteristics, and Requirements for Going Public (source: pexels)

A Tbk company is one with shares available to the public, which can be bought on the Indonesia Stock Exchange (IDX), allowing anyone to become a shareholder. Capital ownership in this company comes from the public, not only from the original owners or specific groups. With Tbk status, the company is obligated to provide transparency and regular financial reporting.

In Indonesia, a Tbk company typically has at least 300 shareholders with a minimum paid-up capital of Rp3 billion. This is regulated by the Capital Market Law and the Limited Liability Company Law, which states that a Tbk company is one that has conducted an initial public offering (IPO).

Characteristics of a Tbk Company

Here are some key characteristics of a Tbk company:

Open Ownership: Shares can be bought and sold by the public through the capital market, allowing anyone to become a shareholder.
Clear Business Purpose: A Tbk company has a clear and measurable business direction aimed at increasing shareholder profits.
Dividend Distribution: As a form of profit-sharing, the company offers dividends to shareholders based on profits earned. However, shareholders can also choose to reinvest dividends for business expansion.
No Government Subsidies: A Tbk company does not receive government assistance of any kind. Business operations and costs are fully borne by the company with the capital collected.
Decision-Making Based on AGM: The Annual General Meeting (AGM) serves as the main forum for determining company policy. Shareholders have the right to participate in the AGM to make strategic decisions for the company.
Information Transparency: As a public company, a Tbk company is required to regularly report its financial statements to both shareholders and authorities such as the IDX. This transparency aims to maintain investor trust and prevent unhealthy business practices.

Requirements to Become a Publicly Listed Company (PT Tbk)

To become a Tbk company, several requirements must be met, including:

Minimum Shareholders and Capital: The company must have at least 300 shareholders and a minimum paid-up capital of Rp3 billion.
Clear Leadership Structure: The company must have a competent leadership structure with qualified board members.
Transparent Financial Reporting: Financial statements and asset conditions must be clear and transparent. A Tbk company is required to report its financial condition quarterly or as per IDX regulations.

Benefits of Becoming a Tbk Company

For companies aiming to expand, Tbk status offers several significant advantages, including:

Broader Access to Capital: By opening shares to the public, the company can raise more capital to fund projects or business expansions.
Reputation and Credibility: Tbk status enhances the company’s image and trustworthiness in the public eye due to meeting transparency and accountability standards.
Business Diversification Potential: A large capital base enables the company to diversify its business, which can reduce financial risks.
Tax Relief: A Tbk company is entitled to income tax (PPh) incentives as regulated by government policies, reducing the company’s tax burden.

Drawbacks of Becoming a Tbk Company

Although offering advantages, Tbk status also carries some risks:

Transparency Demands: A Tbk company must report all financial activities to the IDX, which can result in high administrative costs.
Delisting Risk: Companies that fail to meet capital market standards risk being delisted, impacting their reputation and stock value.
Limited Management Control: Since a large portion of shares are owned by the public, company decisions must consider investor interests. This can limit the original owner’s full control over the company’s direction.

How to Become a Tbk Company

For companies looking to transition to Tbk status, here are a few necessary steps:

Choose an Underwriting Securities Company: The company needs to collaborate with a securities company to conduct the IPO process.
Meet Key Criteria: From a clear leadership structure to complete financial statements, the company must ensure all IDX criteria are met.
Prepare Accurate Financial Reports: Financial statements must be transparent, showing stable profits and actual assets.

Read Also: How to Establish a PT: Step-by-Step Guide

Differences Between PT Tbk and Private PT

The primary difference between a PT Tbk and a private PT is capital transparency. A PT Tbk raises capital from the public through the stock exchange, while a private PT is typically limited to certain individuals. Additionally, a Tbk company is required to publicly report its financial condition, while a private PT is not required to report to the IDX.

PT Formation Services from vOffice

If you plan to establish a PT and wish to expand your business, PT Formation Services with a Bonus Virtual Office from vOffice is the right solution.
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