Every company in Indonesia must have a name which has received official approval. The name of a company can do much to bring success to the company; selection of a suitable name may allow a company to gain much with regard to profits and revenue through the building of its brand.
Why a Company’s Name Is Important for Its Business Functions
The selection of a suitable company name is truly crucial. The name of the company plays an extremely significant role in the growth and public perception of a particular brand. The selection of the company name is a decision that may forever change the fortunes of a company. Some companies were able to select a name that aided in the growth of the company; a few even used the power of their name to ensure that their brand would be known the world over. On the other hand, there are countless other companies which have names that do not properly reflect the brand. Consequently, the company suffers and never attains the level of success which it would have if it had selected a more suitable name. There are several reasons as to why the name of a company is extremely important.
The eventual success of a company is often dictated by first impressions. Therefore, making a powerful impact immediately will serve a company well with regard to branding success. The first thing which a customer will notice about a company is its name. Thus, the name has to send the proper message so as to win over potential customers. The company names indirectly reveals much about the person who owns the company. Thus, a company name leaves an impactful impression on those who see it. A unique and interesting company name can also help customers remember the company. Of course, all companies intend to be memorable for the purposes of customer retention. Thus, a well-chosen name may end up being the driving force behind the building of a deep and fruitful relationship between a company and its customers, while a poorly-chosen one may prevent such relationships from ever taking root.
Portrayal of the Company’s Identity
The name of the company portrays the company’s identity. The name of the company is intended to elicit any of a variety of emotions within the customer. Certain names may even establish a company as a leader within a certain industry. A company name often serves as a brief summary of everything which the company stands for. This holds true for companies of every size, from the smallest to the largest and every company in between. Customers attach certain beliefs and values to the name of a company; when customers do so, the status of the company’s identity is all the more enhanced.
Differentiation of a Company Within Its Industry
There are many companies within any given industry. This fact therefore means that numerous companies supply similar products and services for their customers. For this reason, company owners ought to take steps which will make customers choose to patronize their company instead of others’ Thus, the character of a company is reflected within its name. The name given to a company does much to provide it with an image that will attract many customers.
Selection of a Company Name in Indonesia
The process of selecting a name for a company in Indonesia is one which contains many distinct but important steps. Before a company name of a company in Indonesia can be put into use, its founders must obtain the approval of the Indonesian Minister of Law and Human Rights. This holds true for all companies in the country, including those which are foreign-owned (PT PMA) as well as those which are owned by locals (PT). The founders of a company in Indonesia must have an approved company name before they may be allowed to complete the establishment process of the company. Before a name can be put into use, certain criteria and requirements must be fulfilled. There must be a proof of payment for the application fee which is to be paid for the use of the company name. Government Regulation No. 45 of 2014 regarding the Rates and Types of Non-Tax Revenue Applicable on the Ministry of Law and Human Rights has set such a fee at 200,000 rupiah per application. The payment must be applicable to one company name for which the founders request approval, the validity period of the paid fee will be 60 days as of the paid date, and the paid fee cannot be reimbursed by the founders. There must also be a statement about what name the founders plan to give to the company.
Once this matter has been handled, the next step is to put the name in place. When doing so, the owner of the company must follow Article 5 of Government Regulation No. 43 of 2011 regarding the Filing Procedures and Use of a Limited Liability Company Name. This article states that the proposed company name must fulfill certain requirements before it may receive official government approval. The company name must be able to be written in Roman letters. The name also cannot be the same or almost the same as another existing company name which is in current legal use by another company in Indonesia. It must also not violate general standards of decency and morality. It cannot be the same or similar to the name of any state bodies, government bodies, or international bodies unless the company has received official permission to use such a name. The name cannot be solely comprised of numbers; it must also be able to be spelled and pronounced. The name must not include official terms related to companies, legal entities, or civil partnership. The full name of an Indonesian company may not solely consist the primary purpose of the business, the business activities to be undertaken by the company, or both. Should the purpose of the business or the company’s business activities be a part of the company’s name, all mentions of the purpose or business activities are to be in accordance with the actual business purposes and business activities of the company.
How the Selection of a Company Name in Indonesia Relates to Company Incorporation
Company name selection is directly related to company incorporation. This is true anywhere in the world, including in Indonesia. A misleading name can have a negative effect upon business objectives and activities. Clients across Indonesia tend to reject companies with unsuitable or offensive terms which are used in the company’s name. Furthermore, an invalid name can lead to the delay of the incorporation of the company. Indonesia’s business laws ensure that all company names in the country adhere to the specified laws.
No matter what company name you plan to choose, if you are interested in starting a company to be based in Indonesia, we at Paul Hype Page & Co will be able to assist you. Our knowledgeable and skilled incorporation specialists will take you through every step of the process. We will also deal with any government-related issues that occur during the process on your behalf.
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Selecting a Company Name in Indonesia FAQs
Article 4 of the Minister Regulation No. 4 of 2014 regarding the Application Procedures for Approval of Ratification of a Legal Entity and Amendment of Articles of Association and Submission of Notice of Amendment of Articles of Association and Change of Limited Liability Company Data (Minister Regulation) is the primary law that governs company names in Indonesia. It requires that an application for the use of any company name is to be submitted by the founders of the company to the relevant government authorities through the legal entity information system known as System Administrative Badan Hukum; this system was created by the Directorate General of General Legal Administration.
Local companies (PTs) which have their shares fully owned by Indonesian nationals or legal entities are legally obliged to give the company a name in Indonesian.
However, foreign companies (PMAs) which either have their shares fully owned by foreigners or jointly owned by foreigners and locals can be named in English or any other languages apart from Indonesian. For this reason, PMAs tend to have a greater diversity of names than do PTs; however, this of course does not mean that PTs are an unviable option for company establishment in Indonesia.
It is possible to change an Indonesian company’s name. However, additional rules might apply that do not apply to companies which have been newly established. For example, the Ministry of Law and Human Rights requires all new foreign companies to have at least three words in their company name. Thus, foreign companies which attempt to use a one-word or two-word company name are not allowed to do so. After the name of the company has been changed, the company owner will also need a new tax card to be used by the company. This means the changes need to be approved by a local tax office, the Indonesian Investment Coordinating Board (BKPM), and the Ministry of Law and Human Rights. A notary public will also add an amendment to the Articles of Association of the company to formalize the name change.