The Need for a Deed to Establish a Legal Business Entity

Forming a company in Indonesia is similar to creating a company in other countries. The differences will be the ministerial body or organisation that will approve and accept the company formation. Foreign investors who want to form a company in Indonesia can establish a PT PMA subject to the Negative Investment List. If all is good, let’s get to the process of setting up. One of the steps is to prepare a Deed of Establishment. Have no idea what it is? Time to find out what is a Deed of Establishment in Indonesia Companies.

The deed of establishment in Indonesia companies is a necessity by the Company Law in this country.

 

The Deed

The deed of establishment in Indonesia companies is a necessity by the Company Law in this country. If you are an established business person, you would have an idea on what the deed should consist. Some of you may assume it is similar to a Memorandum of Association or Articles of Association. While an Article of Association is part of company incorporation Indonesia, a deed of the establishment has additional information. As a matter of fact, the deed of establishment contains the Articles of Association.

 

Getting the Deed

Once a business person has cleared the preliminary steps to set up a company in Indonesia, they can get down to the legal part. The legalities of company incorporation begin with engaging a notary public. You can save yourself the time and oversights by hiring a local expert in company incorporation as all of the documents must be in Bahasa Indonesia. One can obtain the standard deed of establishment in Indonesia companies from a notary. The shareholders must be present before the notary to fill up the necessary information. If the shareholders are unable to be present, they must provide a representative through attorney power.

 

Contents of the Deed

The deed of establishment contains the Articles of Association. In short, the Articles of Association includes the following:

  1. Company name and domicile, which means the permanent location of the company.
  2. Company purpose, objective and business expertise.
  3. Period of incorporation.
  4. The authorised capital, subscribed capital, paid-up capital.
  5. Shares.
  6. Details to hold General Meeting of Shareholders.
  7. Appointment, replacement, dismissal of members of the board.
  8. Profits and dividends.

The deed, however, requires several more detailed information such as the following:

  • Details of the Founders: if the shareholders is an individual, do include the name, date of birth, place of birth, current residence and citizenship. If the shareholder is an organisation, the deed requires the domicile and full address of the legal entity, date and registration number.
  • Details of the Board of Directors and Board of Commissioners: The details of each board member such as name, date of birth, place of birth, current residence and citizenship.
  • Details of the Shareholders (other than the founders): The name of every shareholder, number of shares and issued, and paid-up nominal value.

 

Approval of the Deed

After completing the deed of establishment, it must be notarized to be a legal document. After that, business owners must apply to the Ministry of Law and Human Rights to get approval.

Deed of Establishment in Indonesia Companies