Deed of Establishment
An authentic document made before a notary that contains the identity of the founders, company name, domicile, purpose and objective, and company capital. This is an absolute requirement for establishing a legal entity.
1What is a Deed of Establishment?
The Deed of Establishment is a fundamental legal document that serves as authentic proof of the birth of an incorporated business entity such as a PT (Limited Liability Company) or Foundation. This document is made by an authorized Notary and contains all agreements of the founders regarding company identity, capital structure, management composition, and internal company rules. Without a valid Deed of Establishment, a PT cannot be legally recognized as a legal entity separate from its owners.
2Contents and Components of the Deed of Establishment
The Deed of Establishment contains several mandatory components: (1) Complete identities of the founders and management (Directors & Commissioners), (2) Company name and domicile, (3) Company purposes and objectives reflected in the KBLI code, (4) Duration of the company's establishment (can be unlimited), (5) The amount of authorized capital, issued capital, and paid-up capital, (6) The number and nominal value of shares, and (7) Provisions regarding GMS (General Meeting of Shareholders), dividend distribution, and decision-making mechanisms.
3Process of Making the Deed of Establishment
The process begins with consulting a Notary to determine an unused company name. After the name is approved by Kemenkumham (Ministry of Law and Human Rights), the Notary will draft the Deed based on the agreement of the founders. The founders then appear to sign the Deed before the Notary. The signed Deed is then submitted to Kemenkumham to obtain approval (SK Kemenkumham). After the SK is issued, the PT officially becomes a legal entity.
4Importance of the Deed of Establishment
The Deed of Establishment is not just an administrative formality. This document serves as the legal basis for protecting the owners' personal assets from company liabilities (limited liability), opening a company bank account, applying for capital loans, obtaining an NIB (Business Identification Number) and business licenses, and legally transacting with third parties. Without a valid Deed, your company is considered non-existent in the eyes of the law.
Real Example
"Ms. Sari wants to establish a tech startup in the form of a PT. She gathers 2 friends as co-founders. They go to a Notary to make a Deed of Establishment with an authorized capital of IDR 100 million. In the Deed, Ms. Sari is appointed as President Director, while her friends become Commissioners. After the Deed is signed and receives the SK Kemenkumham, Ms. Sari's PT is officially established and can open a bank account in the company's name to receive investments."
Frequently Asked Questions (FAQ)
How much does it cost to make a PT Deed of Establishment?
The cost of making a Deed of Establishment varies depending on the city and notary, ranging from IDR 5-15 million, including the processing of the SK Kemenkumham. Prices can be more expensive for PTs with large capital or complex structures.
How long does the Deed of Establishment process take?
The Deed signing process can be done in 1-2 days after the company name is approved. However, to obtain the SK Kemenkumham, it takes 3-7 working days depending on the AHU Online system queue.
Can the Deed of Establishment be changed?
Yes, the Deed of Establishment can be changed through a Deed of Amendment if there are data changes such as changes in management, capital additions, or address changes. The Deed of Amendment must also receive approval from Kemenkumham.
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