Individual PT
A Limited Liability Company established by only 1 (one) person who serves as both Shareholder and Director. Specifically for Micro and Small Enterprises (MSEs).
1What is an Individual PT?
Individual PT is the latest innovation in the form of business entities in Indonesia introduced through the Job Creation Law. Unlike a general PT which requires a minimum of 2 founders, an Individual PT can be established by just 1 person who serves as the sole Director and Shareholder. This business form is specifically designed for MSME (Micro, Small, and Medium Enterprises) actors who want to get limited liability protection (separation of personal and business assets) without having to find a partner or a fictitious commissioner.
2Requirements and Criteria for Individual PT
Individual PT can only be established for Micro and Small Enterprises with criteria: maximum annual turnover of IDR 5 billion and maximum capital of IDR 5 billion. If the business grows beyond this limit, the Individual PT must be converted into a regular PT within 1 year. Other requirements are the same as a regular PT: having a Notary Deed, SK Kemenkumham, Corporate NPWP, and NIB. The only difference is the simpler ownership structure and no obligation to have a Commissioner.
3Advantages of Individual PT
The main advantage of an Individual PT is the legal protection of personal assets. If the business goes bankrupt or has debts, the founder's personal assets cannot be confiscated unless there is fraud. This is different from a Trading Business (UD) or CV where the owner's personal assets can be dragged in. Individual PT is also more credible in the eyes of banks, investors, and large clients because it is incorporated. The establishment process is faster and cheaper compared to a regular PT because there is no hassle in finding a co-founder or commissioner. Authorized capital can be freely determined without a minimum (unlike a regular PT which used to have a minimum of IDR 50 million).
4Disadvantages and Risks of Individual PT
Although practical, Individual PTs still have tax obligations and financial reports like regular PTs. Must pay Corporate Income Tax (PPh Badan) and prepare audited annual financial reports. If the turnover breaks above IDR 5 billion but is not immediately converted to a regular PT, it could be subject to administrative sanctions or license revocation. Individual PT is also less suitable for businesses that need external investors or plan an IPO because the share structure is limited to 1 person.
Real Example
"Mrs. Rina has a home catering business whose turnover is already IDR 3 billion a year. She wants to protect her house and personal assets from business debt risks. Mrs. Rina then established PT Perorangan Katering Buana with an authorized capital of IDR 50 million. The Deed and SK Kemenkumham were completed in 5 days. With the status of a PT, Mrs. Rina can participate in large company catering tenders that require incorporated vendors. If one day there is a financial problem in the business, her personal house is safe and cannot be confiscated."
Frequently Asked Questions (FAQ)
How much does it cost to set up an Individual PT?
The total cost is around IDR 5-8 million including Notary Deed, Kemenkumham ratification, NPWP, and NIB. Cheaper than a regular PT because the structure is simpler and there is no need to pay fees for a fictitious commissioner.
Can an Individual PT have employees?
Yes, an Individual PT is allowed to recruit as many employees as needed as long as it is still in the Small Business category. Must register employees for BPJS Ketenagakerjaan (Employment) and Kesehatan (Health) like companies in general.
How to convert an Individual PT to a regular PT?
If the turnover exceeds IDR 5 billion, make a Deed of Amendment at the Notary to change the structure into a regular PT (add at least 1 more shareholder). This Deed must be ratified by Kemenkumham and update data in OSS. The process usually takes 1-2 weeks.
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