Law No.11 of 2020 concerning Job Creation or also known as the Omnibus Law was ratified and promulgated on 2 November 2020 (“UU 11/2020”). Law 11/2020 has amended several laws at once.
One of the laws amended in Law 11/2020 is Law No.40 of 2007 concerning Limited Liability Companies (“UUPT”).
There are several provisions in the UUPT which are amended in Act 11/2020, in substance are as follows:
- The legal entity status of the Company is obtained after being registered with the Minister of Law and Human Rights and obtaining proof of such registration. Previously, the Company Law stipulates that the Company obtains its legal entity status on the date of the issuance of the Ministry Decree on the legalization of the Company’s legal entity (approval to the establishment).
- Abolition of determination on the minimum amount of the Company’s Authorized Capital. Previously, the Company Law stipulates that the minimum authorized capital of the Company was IDR 50,000,000.00 (fifty million rupiah).
- Addition of provisions regarding companies with the criteria of Micro and Small businesses (“Micro and Small PT”), such as stipulating the procedures for the establishment, requirements for establishments, establishment and maintaining criteria for Micro and Small Business, among others, as follow:
(a) Company that meets the criteria as a Micro and Small Business can be established by only 1 person.
(b) Shareholders of Micro and Small PT are only individuals and founders can only establish Micro and Small PT at most 1 in every 1 year.
(c) In the event that a Micro and Small PT is no longer meeting the criteria for a Micro and Small Business, it must change its status to a non-Micro and Small PT – to become ordinary Company/PT.
Previously, the Company Law did not specifically regulates the establishment of a Company with the criteria of Micro and Small Business and it requires a Company to be established by at least 2 or more people (except for (a) Company which is wholly owned by the State or (b) a Company that manages a stock exchange, clearing and guarantee institution, depository and settlement institution, and other institutions in accordance with the regulations in the capital market).
In relation to the above matters, currently the government is still preparing Government Regulation as an implementing regulation of the provisions stipulated in Law 11/2020. Law 11/2020 stipulates that the implementing regulations of Law 11/2020 must be stipulated no later than 3 months from the date of promulgation of Law 11/2020.