How to Adjust Your Company’s Deed of Establishment to KBLI 2017
When building and managing a company, certainly many documents are needed. One of the most basic documents is a Deed of Establishment, which is required for many affairs. For example, the ratification of a deed of establishment by the Ministry of Law and Human Rights (“MOLHR”) is a prerequisite for the procurement of a company’s status as a legal entity. In another instance, the Deed of Establishment is required to obtain a Business Identification Number (“NIB”).
In accordance with Government Regulation No. 24 of 2018 on Electronically Integrated Business Licensing Services (“PP No. 24 of 2018”), NIB is the identity of a business actor. It takes the form of 13 random numbers that are protected and included with an Electronic Signature. Aside from functioning as a business’ identity, NIB is utilized to obtain a Business, Commercial, or Operational License. In addition, NIB also functions as a Company Registration Certificate, Import Identification Number, and Customs Access Right.
NIB is published by an Online Single Submission Institution (“OSS”). OSS is a licensing system launched through PP No. 24 of 2018. OSS itself is managed by an institution (“OSS Institution”) which possesses power to issue business licenses for and on behalf of Ministers, Agency Leaders, Governors, or Regents/ Mayors through integrated electronic systems. If OSS has issued an NIB, the NIB is valid as long as the company runs its activities.
KBLI and Its Newest Version
According to Article 22 paragraph (2) letter b of PP No. 24 of 2018, one of the information which must be given by a company when procuring an NIB is the company’s “business field.” Companies are obliged to use the classification of business fields provided in the Standard Classification of Indonesian Business Fields (“KBLI”). Through KBLI, each business field is marked by several digits numbers.
Prior to 2017, KBLI used four digit numbers as markers for each line of business. This changed in 2017, after the issuance of the Head of the Central Bureau of Statistics Regulation No. 19 of 2017 (“Peraturan Kepala BPS No. 19 Tahun 2017”), which acts as an amendment to the previous KBLI. After the enactment of Peraturan Kepala BPS No. 19 Tahun 2017, the OSS Institute utilized the newest version of KBLI, with five digit numbers. This results in a problem for companies which were established before the issuance of the 2017 KBLI, as these companies did not use the 2017 KBLI on their Deed of Establishment.
Why? Because to get an NIB, a Business License, or an Operating Permit, Commercial License through OSS, businesses must input business field numbers based on the latest KBLI, namely KBLI 2017.
Realizing the difficulties experienced by many companies as they were still using the old version of KBLI, the Government of Indonesia issued a Joint Announcement in 2018. This Joint Announcement was made by the Indonesian MOLHR cq. The Directorate General of General Law Administration and the Coordinating Ministry of Economic Affairs cq. OSS Institution. In the announcement, it was emphasized that the OSS Institution will process and issue NIBs for Limited Liability Companies (“LLCs”) who have not used KBLI 2017. However, these LLCs are obliged to adjust their business fields in accordance to KBLI 2017 within a period of 1 (one year).
The adjustment shall be done by making changes to the “purpose and objective” of the company stipulated in a company’s Deed of Establishment, as the Deed is one of the mandatory documents a company must provide when enlisting to the OSS Institution. Thus, the “purpose and objective” section in the Deed of Establishment shall be adjusted to KBLI 2017.
How The Adjustments Are Conducted
As explained in Indonesia’s Company Law (“UUPT”), any changes made towards a company’s purpose and objectives are also changes to the company’s Articles of Association. Consequently, it requires the approval of the General Meeting of Shareholders (“GMS”), and the approval of the MOLHR. Therefore:
- The first step a company must take in adjusting their Deed of Establishment to KBLI 2017 is to conduct a GMS, with the agenda of changing the purpose and objective of the company (commonly stipulated in Article 3 in the Deed of Establishment).
- After the Decision of the GMS has been signed by the shareholders, the company shall bring forth the said Decision to a Notary Public no more than 30 (thirty) days from the day the Decision was made. The Notary Public will then produce a Restatement of the Decision, in Bahasa Indonesia.
- The Notary Public shall submit the changes of the company’s object and purpose to through the Legal Entity Administration System of the Directorate General of General Law Administration (SABH Ditjen AHU), in order to get the approval of MOLHR. This submission shall be made no longer than 30 (thirty) days from the day when the Notarial Deed which contains the Articles of Association Amendment were made.
Only after the changes are approved by the MOLHR, companies can utilize the current OSS system (OSS Version 1.1) to make changes to their “business field” data. As the new OSS system allows manual changes of data, companies can make the said changes themselves. ‘
Contact Us
For more details on how your company can adjust to KBLI 2017, you can contact us through: info@bizlaw.co.id or 0812-9921-5128.
Authored by: Thea Mutiara Khalifa
