The different business entities which exist in Indonesia require different roles to be filled by people who will be hired for their proper operation. Businesses which have either too few or too many people running the business will be likely to encounter various avoidable problems.

 Run an Indonesian company

The successful operation of most companies is often the result of the cumulative efforts of many different people. This fact remains true regardless of the location of the company in question. Thus, in Indonesia, it is usually the case that many people work together to own and run the same company. However, the exact number of people who run a company in Indonesia is entirely dependent on the business entity which has been selected for use. Each business entity in Indonesia has its own necessary requirements which determine how many people are to run it at the same time.

 

Sole Proprietorships

Sole proprietorships, which in Indonesia are also known as Usaha Dagang (UD), are run by just one person; such is implied by the name. The owner of a sole proprietorship has complete control over the company. The owner also receives all the profits which have been generated by the business activities of the company. Those who own a sole proprietorship may also choose to have the company dissolved at any time. However, those who own a sole proprietorship are also completely liable for all losses incurred by the company. As they own the business alone, their investments in the business are also placed at risk.

Taking all of this information into account, it is evident that at any given time, a sole proprietorship is run by just one person.

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Partnerships

Another variety of business entity which exists in Indonesia is the partnership. A partnership is a business entity which arises from an agreement in which multiple people who are involved in the partnership agree to jointly run the company and share the profits which are generated through the company’s business activities. This agreement may either be in written form, oral form, or both. In Indonesia, partnerships are divided into firms (Firma) and limited partnerships (Commanditaire Vennootschap; CV). In both cases, the partnership is run by at least two people at the same time. Although both of these forms of partnership in Indonesia do have certain differences, the similarity regarding the number of owners remains. Therefore, it can be concluded that a partnership in Indonesia is to be run by at least two people; however, there is no upper limit on the number of people who are to be in charge of the partnership. The exact number of people completely depends on the specific details of the partnership agreement in use.

 

Locally-owned and Foreign-owned Companies

Locally-owned companies (PTs) and foreign-owned companies (PT PMAs) are the most complex forms of business entity which may be established in Indonesia. The people who run a PT or a PT PMA in Indonesia can be divided into three categories: shareholders, commissioners, and directors.

The shareholders of the company are those who directly run the company. It is their decisions which are made during a general meeting of shareholders (GMS) which are the primary determinants of the company’s policies. Every PT and PT PMA must have a minimum of two shareholders; these may include nominee shareholders and be either individuals or legal entities.

The commissioners of the company oversee the actions of the directors. Companies which have more than one commissioner will have these commissioners as part of the company’s Board of Commissioners. However, this board is not a necessity because in Indonesia, all PTs and PT PMAs are only required to have at least one commissioner.

The directors of the company are in charge of the direct management of the company. All actions taken by a company’s directors are to be in accordance with the corporate laws of Indonesia as well as the company’s Articles of Association. Companies which have more than one director will have these directors as part of the company’s Board of Directors. However, this board is not a necessity because in Indonesia, all PTs and PT PMAs are only required to have at least one director.

Therefore, a minimum of four people must run a PT or PT PMA at the same time; at least two shareholders, one commissioner, and one director.

If you are interested in starting any type of business entity in Indonesia, let us at Paul Hype Page & Co be the first to assist you. We offer various incorporation packages that pertain to several different business entity types. Contact us and we will help you select the package which best suits all of your business needs.