For entrepreneurs seeking legal protection through an efficient process, the Individual Company (PT Perorangan) presents an innovative solution within Indonesia’s business ecosystem. This article examines the establishment process of a PT Perorangan, covering everything from its definition and legal foundation to registration procedures, costs, benefits, and important limitations to consider.
Individual Company: Definition and Legal Foundation
A PT Perorangan is a legal entity that can be established by a single person, distinguishing it from conventional limited liability companies (PT) that require at least two founders. This concept was introduced to facilitate micro and small enterprises develop their businesses and gain access to capital.
As an innovation in Indonesia’s business legal system, PT Perorangan is regulated under the Job Creation Law (Article 109 point 3), which stipulates authorized capital requirements, and Government Regulation Number 8 of 2021 regarding Company Authorized Capital and Establishment Registration for Micro and Small Businesses.
Comparison Between Individual Company and Conventional PT
| Aspect | Individual Company (PT Perorangan) | Conventional PT |
| Number of Founders | Only 1 person required | Minimum 2 people |
| Authorized Capital | No minimum limit, maximum IDR 5 billion | Determined by founders, no maximum limit |
| Capital Deposit | Minimum 25% of authorized capital | Minimum 25% of authorized capital |
| Establishment Process | Online through AHU system | Through notary and AHU system |
| Establishment Document | Statement of Establishment (no notarial deed) | Notarial Deed |
| Organizational Structure | Single owner only | Minimum 1 director and 1 commissioner |
| Taxation | Final Income Tax 0.5% (revenue < IDR 4.8 billion) or Corporate Income Tax 22% with 50% discount | Corporate Income Tax 22% (with 50% discount for income up to IDR 4.8 billion) |
| Growth Limitations | Max capital IDR 5 billion, max revenue IDR 50 billion | No limitations |
| Adding Investors | Must convert to Conventional PT | Can be done through articles of association amendment |
Requirements for Establishing a PT Perorangan
Founder Requirements
- Indonesian citizenship
- Minimum age of 17 years
- Legally competent (having the capacity to perform legal actions and be legally responsible)
- Possess a national ID card (KTP) and personal tax identification number (NPWP)
Capital Requirements
There is no minimum capital requirement, allowing entrepreneurs to start with capital according to their capabilities. However, there is a maximum capital limit of IDR 5 billion (excluding land and buildings). The owner determines the authorised capital with the stipulation that at least 25% must be paid as proof of commitment.
Practical Steps to Establish a PT Perorangan
1. Preparation of Documents and Information
- Prepare personal identification (KTP and NPWP)
- Determine the company name (prepare several alternatives)
- Prepare information on capital to be deposited
- Identify the type of business activity according to KBLI (Indonesian Standard Industrial Classification)
2. Account Creation and Online Registration
- Access the official AHU Online website: ahu.go.id
- Select the “Perseroan Perorangan” menu
- Register an account by entering your national ID number and company name
- Agree to the applicable terms and conditions
3. Company Data Entry
- Email address and complete company address
- Capital value according to actual business capital
- KBLI code according to business type
4. Owner Data Entry
- Full name, national ID number, tax ID number
- Phone number and email
- Complete address as per ID card
5. Completion of Registration
- Check the statements and approvals
- Click “Submit” to complete
- Download the Statement of Establishment and PT Perorangan Registration Certificate
Practical Tips
- Prepare alternative company names – Names already used by other companies will be rejected by the system
- Understand the appropriate KBLI code – Ensure the KBLI code matches your business type
Advantages of PT Perorangan
Asset Separation and Legal Protection
PT Perorangan provides a clear separation between the owner’s personal assets and company assets, protecting personal wealth from business risks.
Simple Procedure and Affordable Cost
Without requiring a notarial deed and with an establishment cost of only IDR 50,000, the process is much more economical and straightforward compared to conventional PTs.
Access to Capital Facilities
The legal entity status of PT Perorangan increases opportunities to obtain bank loans, attract investment, or secure funding from other financial institutions.
Automatic Electronic Tax ID
After the establishment of PT Perorangan is complete, the owner will receive an electronic company tax ID without having to process it directly at the tax office.
Tax Benefits and Scalability of PT Perorangan
In addition to the operational advantages above, PT Perorangan also offers strategic benefits in terms of taxation and business scalability. This business entity can help entrepreneurs optimize their tax burden and manage their business growth gradually according to capacity.
Tax Aspects of PT Perorangan
PT Perorangan as a corporate tax subject offers several advantageous taxation schemes:
- Final Income Tax for MSMEs at 0.5%: Applicable for revenue below IDR 4.8 billion per year during the first four years.
- Corporate Income Tax Discount: 50% reduction from the normal rate of 22% for taxable income up to IDR 4.8 billion (in accordance with Article 31E of the Income Tax Law).
- Deductible Expenses: Various operational costs can be recorded as deductions from taxable profits.
- Loss Compensation: Business losses in one year can be compensated to the following year.
Scalability of PT Perorangan
PT Perorangan provides flexibility to grow up to certain limits without changing the company structure. Owners can increase business capital independently up to a maximum limit of IDR 5 billion according to expansion needs.
Beneficial Scenarios for PT Perorangan:
- Micro businesses with stable revenue: Enjoy a final tax rate of 0.5% with revenue below IDR 4.8 billion per year.
- Startups preparing for scale-up: Start with small capital and transition to a conventional PT when approaching growth limits.
- Independent professionals or consultants: Operate under a legal entity with personal asset protection and more optimal tax rates.
Limitations and Considerations of PT Perorangan
Despite offering various conveniences, there are several limitations to consider:
Legal and Professional Aspects
The absence of a notarial deed may create the perception that the company’s legality and professionalism are less robust. Owners need to ensure all company documents and permits are well-organized and their authenticity can be accounted for.
Business Growth Limitations
PT Perorangan is limited by a maximum capital of IDR 5 billion and a maximum annual revenue of approximately IDR 50 billion. When a business approaches these thresholds, the owner must prepare to change their business entity status to a conventional PT.
Organizational Structure Limitations
The structure of PT Perorangan consists only of one person acting as both owner and sole manager. This condition can lead to excessive workload and limited management perspective.
Business Continuity Risk
The continuity of PT Perorangan’s business entirely depends on the individual owner. Owners need to prepare contingency plans and succession strategies, as well as plans for conversion to a conventional PT if they need to involve strategic partners.
Conclusion
PT Perorangan offers a practical solution for entrepreneurs wanting to formalize micro and small businesses with clear legal protection, affordable costs, and a simplified process. However, it’s necessary to consider its limitations in terms of credibility, growth constraints, organizational structure, and business continuity risks. The choice between PT Perorangan or conventional PT should be aligned with the business’s long-term plans—whether it will remain small-scale or develop with the addition of investors, partners, and significant expansion.
Need Guidance in Establishing a PT Perorangan?
Understanding all aspects of establishing a PT Perorangan is crucial to avoid legal and administrative obstacles in the registration process. Consult your business plans with us at info@lexara.id to receive guidance tailored to the specific needs of your micro and small business.
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