Understanding the Capital Structure in a Capital Partnership PT (Conventional PT)

In running a business entity, understanding the capital structure is highly fundamental. For a Capital Partnership Limited Liability Company (Perseroan Terbatas/PT), commonly known as a Conventional PT or Regular PT in Indonesia, rules regarding capital are strictly regulated to guarantee legal certainty for founders, shareholders, and third parties (business partners).

The capital structure of a Capital Partnership PT in Indonesia is broadly divided into three main tiers: Authorized Capital, Issued Capital, and Paid-up Capital. Below is an in-depth explanation of these three structures and their legal foundations based on Law Number 40 of 2007 concerning Limited Liability Companies (Company Law/UU PT), as amended by Law Number 6 of 2023 concerning the Enactment of Government Regulation in Lieu of Law on Job Creation into Law (Job Creation Law/UU Cipta Kerja).

1. Authorized Capital (Modal Dasar)

Authorized capital refers to the total nominal value of the Company's shares stated in the Articles of Association. Simply put, authorized capital is the maximum limit of shares that can be issued by the PT. Prior to regulatory reforms, the UU PT stipulated a minimum authorized capital limit of IDR 50,000,000.00 (fifty million Rupiah). However, under the latest provisions in Article 32 paragraphs (1) and (2) of the UU PT as amended by the UU Cipta Kerja, it is determined that the Company must have an authorized capital whose amount is decided based on the agreement of the Company's founders.

This means the Government no longer sets a minimum nominal threshold for the authorized capital of a Capital Partnership PT. The amount is now left entirely to the consensus of the founders and the needs of their business scale.

The elimination of this minimum threshold is intended to create a more inclusive investment ecosystem and make it easier for the public to establish formal legal entities. Nonetheless, for certain specific business sectors (such as banking, insurance, or transportation), specific minimum capital requirements remain applicable in accordance with their respective sectoral regulations and the chosen Indonesian Standard Industrial Classification (KBLI).

2. Issued Capital (Modal Ditempatkan)

Issued capital is the amount of shares that the founders or shareholders have subscribed to or agreed to purchase at the time the PT is established. This capital reflects the initial capital commitment from the shareholders.

The UU PT sets a minimum percentage limit of capital that must be issued from the total authorized capital agreed upon by the founders. Referring to Article 33 paragraph (1) of the UU PT, at least 25% (twenty-five percent) of the authorized capital referred to in Article 32 must be issued.

3. Paid-up Capital (Modal Disetor)

Paid-up capital is the portion of the issued capital that has actually been deposited or paid in real terms by the shareholders into the company's treasury (or a bank account under the name of the PT). The amount of paid-up capital must be exactly equal to the amount of issued capital (which is at least 25% of the authorized capital) and must be fully settled upon approval. Based on Article 33 paragraph (1) of the UU PT, the issued capital must be fully paid up at the time the PT's legal entity status is approved. This payment must be legally verified by actual proof of deposit into the Company's account or through other legally valid forms of payment (Article 33 paragraph (2) of the UU PT).

4. Illustration of Capital Structure Application

In order to make it easier to understand, here is an example of its application:

If the founders agree to establish a Capital Partnership PT and set the Authorized Capital at IDR 100,000,000.00, then based on the provisions of Article 33 paragraph (1) of the UU PT:

• The minimum Issued Capital is .
• The Paid-up Capital must be fully settled in the exact same amount as the issued capital, which is .
• The remaining IDR 75,000,000.00 of the authorized capital can be issued and subscribed to by shareholders in the future according to the company's expansion needs through the mechanism of increasing issued and paid-up capital.

A proper understanding of the capital structure that complies with the regulations of the UU Cipta Kerja and the UU PT will ensure that a company's operational legality runs safely and accountably in the eyes of the law.

5. Conclusion

Fundamentally, the capital structure in a Capital Partnership PT (Regular PT) must be understood linearly as a single unity consisting of Authorized Capital, Issued Capital, and Paid-up Capital. Through the latest regulations in the UU Cipta Kerja, the Government provides full flexibility for founders to determine the amount of the company'sAuthorized Capital without the minimum limit of IDR 50 million as regulated in previous rules.

Nevertheless, the principles of legal certainty and financial commitment are strictly maintained through Article 33 paragraph (1) of the UU PT. This provision requires founders to allocate at least 25% of the Authorized Capital as Issued Capital, which simultaneously must be Fully Paid Up into the company's treasury or account at the time of legal entity approval. Compliance with the integration of these three tiers of capitalization is the main key to guaranteeing the legality, accountability, and operational security of a Regular PT in Indonesia.