Individual PT vs Regular PT – Starting a business can be a daunting task. Why? Establishing a business entity is a crucial step for every businessman. But establishing a business entity itself is an important step in a businessman’s journey so that the business can run and be protected.

In Indonesia, a Limited Liability Company (PT) is one of the most commonly used forms of business entity. PT has a legal entity status that separates the company’s assets from the owner’s personal assets and provides legal protection and facilitates business management.

In this article, we will discuss the comparison between an Individual PT and a Regular PT, which can determine what type of PT suits your business needs.

Understanding Individual PT

Individual Limited Liability Companies (PT Perorangan) are a form of legal entity that can be established by only 1 (one) person without a minimum capital amount and meets the criteria of Micro, Small and Medium Enterprises (MSMEs).

Understanding Regular PT

A Limited Liability Company (PT Biasa), hereinafter referred to as the Company, is a legal entity which is a capital association, established based on an agreement, conducting business activities with authorized capital which is entirely divided into shares and fulfilling the requirements stipulated in this Law and its implementing regulations.

Types of Individual PT

None. a PT Perorangan combines the concept of a PT with a sole proprietorship, allowing one person to establish a PT without minimum authorized capital and without requiring a notarial deed.

Types of Regular PT

1. Public PT (Tbk)
2. Private PT (Ltd)
3. Subsidiary PT
4. Joint Venture PT
5. Public PT (Non-Tbk)
6. Commanditer PT (CV)
7. Perseroan PT (Company)

Advantages of Individual PT

1. Get certainty of legal entity status
2. Separation of personal assets from company assets
3. PT Perseroan will have its own NPWP
4. Establishment is very easy, can be done online (no need to go to a notary)
5. Free establishment capital (can be IDR 0 to IDR 5 billion)
6. Can create a bank account in the name of the company
7. Certificates can be used as legal completeness for submitting capital loans to banks and investors
8. One tier system, founders become directors and shareholders
9. Priority if there is a government program specifically for MSMEs

Advantages of Regular PT

1. Legal Protection
2. Wider Access to Capital
3. Growth Potential
4. Credibility
5. Ease of Transfer of Ownership
6. Organizational Structure
7. Unlimited Time

Disadvantages of Individual PT

1. High Personal Responsibility
2. Limited Access to External Capital
3. Difficulty in Attracting Investors
4. Risk of Regulatory Changes
5. Limited Business Scale
6. Limited Decision Making
7. Limited Human Resources
8. Risk of Losses in Personal Hands
9. For MSMEs Only

Disadvantages of Regular PT

1. More Difficult Incorporation Procedures – Administrative Complexity and Costs
2. Higher Potential for Shareholder Conflict
3. Slower Decision-Making Process
4. Limited Flexibility
5. Higher Tax Liability
6. Legal and Reporting Liabilities
7. Regulatory and Compliance Demands
8. Limitations in Management

Requirements for Establishing an Individual PT

1. Founders must be at least 17 years old
2. Legally competent
3. Founders must be Indonesian citizens (WNI)
4. Founders can only establish once a year
5. Resident Identity Card (KTP)
6. Founder’s Taxpayer Identification Number (NPWP)
7. The name of the Individual Company must be in accordance with the provisions of laws and regulations and must not be the same as the name of a registered Limited Liability Company
8. Active email
9. Active mobile phone number
10. Upload proof of transfer of authorized capital to the company account, no later than 6 months from the registration of the Individual Company

Requirements for Establishing a Regular PT

1. Minimum of two founders
2. Have a PT name that has not been used by another company
3. Determine the term of the PT
4. Determine the purpose and objectives and business activities of the PT
5. Have initial capital in accordance with applicable provisions
6. Each founder of the PT is required to take part in shares at the time of establishment of the PT
7. Follow the registration procedures set by the government
8. Attach a copy of the Resident Identity Card (KTP) and NPWP of the shareholders, directors, and board of commissioners if all Indonesian, If foreign, the passports of the shareholders, directors, and board of commissioners
9. Telephone numbers and emails of directors & company

Differences between Individual PT and Regular PT

Number of Founders

As regulated in Article 7 of Law Number 40 of 2007 concerning Limited Liability Companies, the process of establishing a company (Regular PT) can be carried out by two or more people with a notarial deed made in Indonesian.

Meanwhile, a company with the UMK criteria (Individual PT) can be established by one person within one year, based on a statement of establishment made in Indonesian. This is as stated in Article 153E of Law 6/2023, which is an additional article of Law Number 40 of 2007 concerning Limited Liability Companies.

Capital and Turnover Limits

Individual PT do not have a minimum authorized capital. However, the authorized capital for Individual PT is only limited to IDR 5 billion considering its UMK scale.

The establishment of a Regular PT is no longer determined by a minimum figure for its authorized capital. The amount of authorized capital of a company (Regular PT) is determined based on the decision of the company’s founders. This is as stated in Article 109 paragraph (3) of Law 6/2023.

Form of Legal Document

In the process of its establishment, the Establishment Document of an Individual PT is a Certificate of Establishment Statement which can be processed through the PTP AHU Online page. So, an authentic deed made by a notary is not required in the process of establishing an Individual PT.

Regular PT requires the services of a notary to make an authentic deed through the General Legal Entity Administration System (AHU Online).

Dissolution

Dissolution in an Individual PT is carried out by filling in the dissolution statement form electronically through SABH.

Unlike the dissolution of an Regular PT, it occurs under conditions such as based on a GMS decision, the period of its establishment has been determined in the articles of association, and based on a court decision and bankruptcy.

Conclusion

By knowing the difference between Individual PT and Regular PT, you can adjust it to your needs. Whether with Individual PT and Regular PT for your business.

Difficult to determine & do not know how to establish a PT for your business?

Let’s contact Indoservice now & consult with us.

Indoservice, a secretarial and licensing services consulting company firm that can assist you in establishing a company in Indonesia and business-related licensing. Trusted and experienced in Indonesia, committed to providing the best and fast service to meet your needs.

Our consultants will assist you in the process of establishing a company and obtaining permits related to your company’s business in Indonesia. Contact us now at +62877-1449-8500 or admin@indoservice.co.id.