Articles Of Association For LLC Template for Indonesia
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What is a Articles Of Association For LLC?
Articles of Association For LLC (PT) is a mandatory document required for establishing a limited liability company in Indonesia. This document must be prepared when incorporating a new company or modifying an existing company's constitutional framework. It contains essential information about the company's identity, objectives, capital structure, management framework, and operational procedures, all of which must comply with Law No. 40 of 2007 and related regulations. The document must be drafted in Indonesian language and executed before a notary public, with subsequent registration and approval required from the Ministry of Law and Human Rights. It serves as the primary reference for corporate governance, shareholders' rights and obligations, and company management, forming the foundation for all corporate actions and decision-making processes.
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Frequently Asked Questions
Are Articles of Association legally binding for Indonesian LLCs (PT)?
Yes, Articles of Association for LLCs (PT) are legally binding documents under Indonesian Law No. 40 of 2007 (UUPT). Once executed before a notary and registered with the Ministry of Law and Human Rights, they become the constitutional foundation of your company and are enforceable by Indonesian courts. All shareholders, directors, and commissioners must comply with the provisions outlined in this document.
Can my Indonesian PT operate without proper Articles of Association?
No, your Indonesian PT cannot legally operate without properly executed Articles of Association. Under Law No. 40 of 2007, this document is mandatory for company establishment and must be notarized and registered with MOLHR. Operating without valid Articles of Association means your company lacks legal status, cannot open bank accounts, enter contracts, or conduct business legally in Indonesia.
How much minimum capital must be stated in Indonesian PT Articles of Association?
Indonesian PT Articles of Association must specify authorized capital of at least IDR 2.5 billion, with at least 25% paid up at incorporation (minimum IDR 625 million). However, certain business sectors may require higher minimum capital amounts under specific regulations. The capital structure, including share classes and nominal values, must be clearly detailed in the Articles of Association.
How are Articles of Association different from company bylaws in Indonesia?
In Indonesia, Articles of Association (Anggaran Dasar) serve as both the constitutional document and internal bylaws for a PT. Unlike some jurisdictions that separate these documents, Indonesian law combines them into one comprehensive document under UUPT. This single document covers company identity, objectives, capital structure, governance rules, and operational procedures that would typically be split between articles and bylaws elsewhere.
How long does notarization of Indonesian PT Articles of Association take?
Notarization of Articles of Association typically takes 1-3 business days once all required documents and shareholders are present. However, the complete process including name approval, notarization, and MOLHR registration usually takes 2-4 weeks total. Preparation time varies depending on document complexity and whether you're using a lawyer or handling the drafting yourself.
Which mistakes invalidate Indonesian PT Articles of Association?
Common invalidating mistakes include incorrect minimum capital amounts, improper business purpose descriptions that don't match Indonesian business classification codes (KBLI), missing mandatory provisions required by UUPT, and failure to specify proper governance structures. Additionally, using prohibited company names or failing to include required shareholder information can cause rejection by the Ministry of Law and Human Rights during registration.
Can foreign investors use standard Articles of Association templates for Indonesian PT?
Foreign investors cannot simply use standard templates without significant modifications for Indonesian compliance. Articles of Association must comply with foreign investment regulations (Law No. 25 of 2007), specify business activities allowed for foreign ownership, and include provisions for Indonesian nominee arrangements if required. Professional legal review is essential to ensure the template meets both UUPT requirements and foreign investment restrictions for your specific business sector.
About the Articles Of Association For LLC
When establishing a limited liability company (PT) in Indonesia, you need Articles of Association that comply with Indonesian corporate law. This constitutional document serves as your company's legal foundation, defining its structure, operations, and governance under Law No. 40 of 2007. The Articles must be prepared in Indonesian language and executed before a notary public, followed by registration with the Ministry of Law and Human Rights for legal recognition.
When do you need this document?
You need Articles of Association when incorporating a new PT, whether for domestic or foreign investment purposes. This requirement applies to all business sectors, from manufacturing and trading to services and technology companies. The document is also necessary when making fundamental changes to your existing company, such as altering the business scope, modifying capital structure, or changing the company name. If you're establishing a joint venture with Indonesian or foreign partners, the Articles will define each party's rights and obligations. Additionally, you'll need updated Articles when converting from another business entity type to a PT structure.
Key legal considerations
Your Articles must specify the authorized, issued, and paid-up capital amounts, with minimum requirements varying by business sector and foreign ownership levels. The document should clearly define share classes, voting rights, and transfer restrictions to protect shareholders' interests. Board composition requirements must comply with Indonesian regulations, including mandatory appointment of Indonesian commissioners for certain business activities. You need to include proper dividend distribution mechanisms and procedures for general meetings of shareholders. The business scope must be specific and align with Indonesian Standard Industrial Classification codes, as overly broad objectives may face regulatory rejection.
Legal requirements in Indonesia
Under Law No. 40 of 2007 and Government Regulation No. 43 of 2011, your Articles must include the company's complete legal name with "PT" designation, registered domicile, and business duration. The minimum authorized capital is IDR 2.5 billion for most sectors, with at least 25% paid-up at incorporation. For foreign investment companies, additional compliance with Law No. 25 of 2007 is required, including adherence to the Negative Investment List. The document must be notarized and submitted to MOLHR within 60 days of signing, along with required supporting documents. Government Regulation No. 8 of 2021 governs capital requirements and share issuance procedures, while MOLHR Regulation No. 4 of 2014 specifies the application procedures for legal entity status approval.
GOVERNING LAW
Applicable law
This Articles Of Association For LLC is drafted to comply with Indonesia law. Key legislation includes:
Government Regulation No. 43 of 2011: Regulation regarding procedures for filing and usage of company names
Law No. 25 of 2007: The Investment Law - Regulates both domestic and foreign investment in Indonesian companies
MOLHR Regulation No. 4 of 2014: Procedures for filing application for legal entity status approval and changes to company data
Government Regulation No. 8 of 2021: Authorized capital, issuance and acquisition of shares, and provision of financial assistance
Law No. 13 of 2003: The Labor Law - Relevant for provisions regarding employment relationships that need to be referenced in the Articles of Association
MOLHR Regulation No. 1 of 2016: Guidelines for company establishment procedures and standard forms for Articles of Association
Law No. 11 of 2020: The Omnibus Law (Job Creation Law) - Contains various amendments to company-related regulations
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