Understanding the structure and requirements for establishing a Commanditaire Vennootschap (CV) is a crucial first step for entrepreneurs who want to start or develop their business in Indonesia. CV, also known as Limited Partnership, is a type of business entity that offers flexibility in management and risk sharing between active partners and passive partners. By understanding the unique characteristics of CVs, such as the limited liability of passive partners and the active role of complementary partners in business operations, entrepreneurs can utilize this structure to protect personal assets while running the business.
The establishment of a CV in Indonesia is regulated by law and requires the fulfillment of certain conditions. This process involves making a notarial deed, registration with the relevant agency, and processing other legal documents. Therefore, it is important for prospective founders to understand in depth these requirements, including the obligation to have at least two founders who are Indonesian citizens, as well as the prohibition against foreign capital participation in CV ownership.
By paying attention to the legal and operational aspects of establishing a CV, entrepreneurs can ensure that their business stands on a strong foundation and is ready to grow. This article will discuss further a brief introduction to CVs, the importance of understanding the requirements for establishing a CV, as well as tips and strategies for maximizing your business potential through the Commanditaire Vennootschap structure.
What is a CV?
CV, or Commanditaire Vennootschap, is a form of business entity that is quite popular in Indonesia, especially among small and medium businesses. By definition, CV is a partnership consisting of one or more people who act as complementary partners with unlimited liability and one or more people as limited partners who only bear losses up to the capital invested. This means, in CV, there is a clear division of roles between business managers (active partners) and investors (passive allies), where passive partners are not involved in the day-to-day management of the business.
The fundamental difference between CV and other types of business entities such as PT (Limited Liability Company) lies in the ownership structure and responsibilities. PT is a legal entity whose capital is divided into shares and each shareholder has limited liability according to the number of shares owned. Meanwhile, CV is not considered a legal entity because there are no regulations governing it, so the establishment process tends to be simpler and does not require large authorized capital like PT. Apart from that, in PT, management is carried out by directors selected through the GMS, whereas in CV, management is carried out by active partners who can also act as investors.
In the Indonesian context, CV is often the choice for entrepreneurs who want to start a business with relatively small capital and a flexible structure. CV allows entrepreneurs to arrange special agreements regarding the sharing of profits and losses, as well as business management, which can be tailored to the needs and agreements between partners. Thus, CV provides space for entrepreneurs to innovate and adapt to market dynamics without being bound by the many regulations that are usually required for other business entities such as PT.
Therefore, understanding what a CV is and how it differs from other types of business entities is very important for aspiring entrepreneurs. This not only helps in choosing the type of business entity that best suits the business plan, but also in ensuring that all legal and operational aspects can be carried out properly and in accordance with applicable regulations.
Advantages and Disadvantages of CV
In the business world, choosing the right form of business entity is an important decision that can influence long-term success. Commanditaire Vennootschap (CV) or Commandery Fellowship offers a number of benefits that make it an attractive option for many entrepreneurs.
Advantages of CV:
- Easy Establishment Process: There is no minimum capital requirement set by the government, making it easier to establish a CV.
- Management Flexibility: The owner is free to arrange the company management structure according to the roles and responsibilities of each party.
- Potential for Greater Capital: The business capital collected can be greater depending on the number of limited partners.
- Easy Access to Bank Credit: CVs often find it easier to obtain credit from banks, which can accelerate business growth.
- Opportunities to Participate in Government Tenders: CV has the opportunity to participate in government tenders³.
Disadvantages of CV:
- Unlimited Liability: Complementary partners have unlimited liability, meaning their personal assets can be used to cover business losses.
- Risk of Personal Financial Loss: As a form of business entity with unlimited liability, CV also carries the risk of personal financial loss.
- Potential for Internal Dispute: The difference in roles between active and passive allies can cause internal conflict.
- Limited Access to Funding: CV may face limitations in access to funding, especially from foreign investors due to existing regulations.
- Withdrawing Capital is Difficult: Withdrawing capital by limited partners can be a difficult and complicated process.
- By considering the points above, prospective founders can assess whether CV is an appropriate structure for their business and prepare appropriate strategies to manage risks that may arise.
Requirements for Establishing a CV
In order to establish a Commanditaire Vennootschap (CV) in 2024, there are several terms and conditions that must be fulfilled by prospective entrepreneurs in Indonesia:
- Understanding Legality: Understanding the legality and applicable regulations is the main key in establishing a CV (Commanditaire Vennootschap) in Indonesia.
- CV Founder: CV must be founded by a minimum of two people, consisting of an active partner and a passive partner.
- Notarial Deed: The process of establishing a CV must be supported by a notarial deed written in Indonesian and containing the identity of the founder, business activities, rights and obligations of the founders, as well as the period for which the CV was established.
- Indonesian Citizenship: The CV founder must be an Indonesian citizen, and CV ownership must be 100% Indonesian citizen.
- Establishment Documents: Prepare the necessary documents such as photocopies of active and passive partners’ KTPs, photocopies of the NPWP of the person in charge of the company, domicile certificate, and KBLI statement.
- Business Licensing: Obtain the necessary business permits and licenses according to the type of business being run.
- Capital Structure: Determine the capital structure of the CV, including the amount of authorized capital and paid-in capital.
- CV Management: Appoint a CV administrator who will be responsible for daily operations.
- Ratification of SABU: Ratifying the Deed of Business Establishment (SABU) at the Ministry of Law and Human Rights.
- NPWP and Tax SKT: Manage Taxpayer Identification Number (NPWP) and Tax Registration Certificate (SKT) for CV.
- Business License Number (NIB): Manage NIB which is the main requirement for operating as a business entity in Indonesia.
Documents Required to Establish a CV
In the process of establishing a Commanditaire Vennootschap (CV) in Indonesia, there are a series of important documents that must be prepared by prospective entrepreneurs. These documents are the main requirements that must be met to ensure that the CV establishment process can run smoothly and in accordance with applicable legal provisions.
- Founder’s Identity: Include a photocopy of the identity (KTP) of all CV founders, both active and passive partners.
- NPWP of the Person in Charge: Attach a photocopy of the Taxpayer Identification Number (NPWP) of the person in charge of the company.
- Domicile Certificate: Provide a legalized domicile certificate, or use a building domicile certificate if using Virtual Office.
- KBLI: Fill out and include a stamped statement letter for the Standard Classification of Indonesian Business Fields (KBLI).
- Company Contact: Write down a valid company telephone number and email as part of the founding documents.
- Notarial Deed: Make a notarial deed written in Indonesian which includes the identity of the founder, business activities, rights and obligations of the founders, as well as the period of existence of the CV.
- Additional Documents If Authorized: If the company is authorized, a legalized power of attorney and minutes are required.
- Ratification of SABU: After the deed of establishment is made, it is necessary to ratify the Deed of Business Establishment (SABU) at the Ministry of Law and Human Rights.
- Tax SKT: Manage a Tax Registered Certificate (SKT) at the local tax office.
- Business License Number (NIB): Manage NIB which is the main requirement for operating as a business entity in Indonesia.
By preparing these documents completely and accurately, the CV establishment process in 2024 will run smoothly.
Procedure for Establishing a CV
Starting a business requires a deep understanding of applicable legal procedures, especially when you decide to set up a Commanditaire Vennootschap (CV) in Indonesia.
- CV Name Selection: Choose a unique and unregistered name for your CV. This name submission must be approved by a notary.
- Determining CV Founders: Determining who will be active and passive allies in CV. Active partners will be responsible for managing the business, while passive partners will only act as funders.
- Establishment Documents: Prepare the necessary documents such as a photocopy of the founder’s KTP, NPWP of the person in charge of the company, domicile certificate, and KBLI statement.
- Deed of Establishment of CV: Draft the deed of establishment of CV which will be made by a notary. This deed must include all important information related to the CV, including the capital structure and management of the CV.
- Ratification of the Deed of Establishment: After the deed of establishment is drawn up, the deed must be ratified before a notary and then at the Ministry of Law and Human Rights.
- NPWP Management: Manage Taxpayer Identification Number (NPWP) for CV at the local tax office.
- Tax SKT: Obtain a Tax Registration Certificate (SKT) which is proof that the CV has been registered as a taxpayer.
- Business License Number (NIB): Manage NIB which is the main requirement for operating as a business entity in Indonesia.
CV Establishment Costs
Establishing a Commanditaire Vennootschap (CV) in Indonesia is an important step for entrepreneurs who want to develop their business with a more formal and organized structure. The cost of setting up a CV is one aspect that is often considered because it is directly related to the initial financial planning of the business. Based on the latest information, the cost of setting up a CV in Indonesia ranges from IDR 3-8 million. These costs cover various aspects, such as making a notarial deed, costs for processing a Business Identification Number (NIB), Tax Registration Certificate (SKT), Taxpayer Identification Number (NPWP), as well as registration with the Ministry of Law and Human Rights (Kemenkumham).
It is important to note that these costs may vary depending on the services selected and the complexity of the documents required. For example, the cost of notary services can vary depending on the reputation and location of the notary’s office. Additionally, the use of online licensing services can also affect costs, with different service packages offering varying prices and facilities. Some services may offer a complete package covering all administrative processes, while others may only handle certain aspects of the CV establishment process.
By understanding the details of the costs and procedures required, prospective CV founders can make more informed decisions and avoid unexpected costs that may arise. Apart from that, having a clear budget for establishing a CV also helps in managing cash flow and ensuring that all legal processes can be carried out smoothly. Thus, establishing a CV not only provides a strong legal structure for your business, but also shows your commitment to transparency and professionalism in running your business.
Skaiwork Can Help Establish a CV
Establishing a Commanditaire Vennootschap (CV) in Indonesia is not only a step to starting a business, but also a process that ensures the sustainability and growth of your business in the future. Fulfilling the requirements for establishing a CV is an inseparable foundation for this process, because without fulfilling these requirements, your business may face legal obstacles that can hamper business operations and growth. Requirements such as Indonesian citizenship, 100% ownership by Indonesian citizens, as well as the required legal documents, are some of the many aspects that must be met to establish a CV that is valid and recognized by law.
The conclusion that can be drawn is that the CV establishment process must be carried out carefully and in accordance with applicable regulations. This is not only important to ensure that your business operates within legal corridors, but also to build trust and credibility in the eyes of customers, partners and financial institutions. Therefore, it is highly recommended for prospective entrepreneurs who want to set up a CV to consult with parties who have expertise and experience in this matter.
Skaiwork offers professional assistance in the process of establishing a CV, from the initial consultation to completing the required legal documents. With the help of Skaiwork, you can ensure that all aspects of your CV establishment are handled professionally and in accordance with applicable legal standards. So, if you need help or have further questions regarding CV establishment, don’t hesitate to contact Skaiwork. Their team is ready to assist you in every step of the CV establishment process, ensuring that your business can run smoothly and successfully in the future.