Get to know Authorized and Paid Up Capital Establishment of a Company – The times are always changing, especially in new businesses, which makes us also need to learn a lot. Knowing how to manage funding for a company, especially what we are currently running related to the establishment of a corporate entity is very important.
Often startup companies can achieve very high numbers and to achieve this requires a high investment. The success of startup business development cannot be separated from funding. Generally, the funding will be used as capital for company development.
Below we will explain the meaning of each type of capital, The terms authorized capital, subscribed capital, and paid-up capital are known in Law Number 40 of 2007 concerning Limited Liability Companies (UU PT).
Based on the book published by M. Yahya Harahap, in his book on Limited Liability Company Law explains that authorized capital is the entire nominal value of the company’s shares mentioned in the articles of association. The authorized capital of the company in principle is the total number of shares that can be issued by a limited liability company (PT).
The articles of association itself determine how many shares are used as authorized capital. The amount specified in the articles of association is the “pure face value” (on page 233).
Regarding the authorized capital of PT, Article 109 number 3 of Law Number 11 of 2020 concerning Job Creation (UU Cipta Kerja) which amends Article 32 of the Limited Liability Company Law stipulates as follows:
- The Company must have the authorized capital of the Company.
- The amount of authorized capital of the Company as referred to in paragraph (1) is determined based on the decision of the founder of the Company.
- Further provisions regarding the authorized capital of the Company are regulated in a Government Regulation.
In line with the above provisions, Government Regulation Number 8 of 2021 concerning Authorized Capital of Companies and Registration of Establishment, Changes, and Dissolution of Companies that Meet the Criteria for Micro and Small Businesses (PP 8 of 2021) stipulates that the amount of authorized capital of PT is determined based on the decision of the founder of PT . Thus, it can be concluded that at this time the minimum limit for the authorized capital of PT.
Subscribed capital is the number of shares taken by the founders or shareholders and some of these shares have been paid and some have not been paid. So, issued capital is capital that the founder or shareholder is able to pay off by him, and the shares are handed over to the shareholders to be owned.
Based on Article 33 Paragraph 1 of the Limited Liability Company Law and Article 4 PP 8/2021, a minimum of 25% of the authorized capital must be placed and fully paid up with valid proof of deposit. A valid proof of deposit must be submitted electronically to the Minister of Law and Human Rights within 60 days from the date of the company’s deed of establishment or filling in the statement of establishment for individual companies.
Paid-up capital is capital that has been entered by the shareholders as payment for the shares taken as issued capital from the authorized capital of the company. Simply put, paid-in capital is shares that have been paid in full by shareholders. Same as issued capital, this provision for paid-up capital refers to Article 33 Paragraph 1, so that a minimum of 25% of the authorized capital must have been issued and fully paid up when establishing PT.
Thus the explanation of authorized capital, issued capital and paid-up capital.
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Source : www.hukumonline.com