What will happen if 1 attempts to Incorporate a company in Indonesia without any Shareholders

Shareholders play extremely important roles in any company. Through their ownership of shares, they collectively serve as the owners of the company. For this reason, most companies around the world have a number of shareholders which is in line with the laws and regulations governing companies in their respective countries. Such is also the case in Indonesia, where most companies also have a specific number of shareholders according to legal requirements. 

 

Company Types in Indonesia Which Require Shareholders 

The number of shareholders required by any company in Indonesia is dependent on the business entity type of the company in question. One of the business entities in Indonesia which require shareholders is that of the foreign-owned company (PT PMA). Every PT PMA based in Indonesia must have a minimum of two shareholders. The shareholders of a PT PMA may be individuals, corporate entities, or a combination thereof. Individuals who own shares of a PT PMA may either be Indonesian locals or foreigners. A locally-owned limited liability company (PT) is also required to have shareholders. Every PT which has been incorporated in Indonesia is mandated to have at least two Indonesian shareholders. A foreign-owned limited liability company (PMA) is required to have a minimum of two shareholders; however, if the PMA is completely owned by foreigners, its owners are to sell at least 5% of its shares to a citizen of Indonesia or a legal entity based in Indonesia. Public companies have by far the most stringent requirement related to shareholders among all Indonesia-based companies; they are to have a minimum of 300 shareholders. 

 

Company Types in Indonesia Which Do Not Require Shareholders

Not every business entity which exists in Indonesia is required to have a specific number of shareholders. Such business entities include sole proprietorships (UDs) as well as civil partnerships which can be divided into firms and limited partnerships (CVs). UDs are set up in such a way that their owner will have access to complete control of the company. Therefore, they are set up to specifically prevent shareholders from controlling portions of the company’s ownership; thus, UDs do not require any shareholders. Civil partnerships also have characteristics which allow them to operate without having any shareholders. This fact applies to firms and CVs alike. Firms involve multiple partners who each play active roles in the management and ownership of the company. Thus, there is no need for a firm to have any shareholders. Partners who own a CV are divided into active and passive partners. Active partners are those who directly run the CV, while passive partners are those who invest funds on behalf of active partners. As is the case with firms, the nature of CVs mean that they will not have any shareholders. 

 

Implications 

The facts which have already been mentioned make it clear that if one attempts to start a PT PMA, PT, PMA, or public company in Indonesia without having any accompanying shareholders, the incorporation will be invalid. However, one can start a UD, CV, or firm in Indonesia without having any shareholders because their respective business structures allow them to be in full operation without a need for any shareholders. 

Perhaps you have become interested in starting a company of your own in Indonesia. Regardless of which business entity you select or how many shareholders are required by your company, we at Paul Hype Page & Co will be able to guide you through the entire process of incorporation in Indonesia. Once we have helped you set up your new company in Indonesia, you may then proceed with the selection of shareholders who will collectively own and help to dictate the policies of your new company, should the business entity which you have selected require any. 

 

Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.

Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia

Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.

 

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