The Government of the Republic of Indonesia has formally enacted new provisions governing the requirements and procedures for the establishment, amendment, and dissolution of limited liability companies through the promulgation of Regulation of the Minister of Law of the Republic of Indonesia Number 49 of 2025, dated 17 December 2025 (“Regulation 49/2025”).
Regulation 49/2025 revokes and replaces the previous implementing regulation, namely Regulation of the Minister of Law and Human Rights of the Republic of Indonesia Number 21 of 2021, which previously served as the technical and procedural guideline for the implementation of the provisions under the Indonesian Company Law (Undang-Undang Perseroan Terbatas). Regulation 49/2025 currently serves as the primary implementing regulation governing the entire lifecycle of a limited liability company, from its establishment, amendments of articles of association and company’s data, through to the dissolution of the legal entity. All of administrative processes are to be conducted electronically through the Legal Entity Administration System (Sistem Administrasi Badan Hukum or “SABH”).
Please see below key changes introduced under Regulation 49/2025. This publication will primarily focus on the changes pertaining to capital partnerships (the most prevalent form of limited liability companies in Indonesia).
Classification of limited liability companies
Regulation 49/2025 reaffirms the classification of limited liability companies into two distinct legal entities, namely:
- Capital Partnerships (Persekutuan Modal) – “CP”), which established by at least two parties pursuant to an agreement, with its capital divided into shares; and
- Individual Companies (Perseroan Perorangan), which established by an individual for the purpose of conducting micro and small enterprise business activity.
This aligns with the introduction of a novel form of limited liability companies, i.e., individual companies, as initially introduced under the amendments to the Company Law pursuant to the Omnibus Law.
Review of the Submission
One of the significant changes (and potentially a setback) introduced by Regulation 49/2025 is the review process for the amendments to the CPs’ articles of association or company’s data. Previously, all submitted information and supporting documents were under the responsibility of public notaries, eliminating the need for a review process by the MoLHR. Consequently, approval or receipt of notification regarding the amendments could be issued on the same day as the application date, provided there were no errors or issues during the process. However, this streamlined process has been altered under Regulation 49/2025. Specifically, Article 13 of the regulation mandates a review of the application for amendments to articles of associations and company data. The review will be conducted within a maximum of 14 business days from the receipt of the application. Should the review identify inconsistencies in information or lack of supporting documents, the MoLHR may request the notary to amend the application or complete the necessary supporting documents.
Annual Report
Regulation 49/2025 strengthens corporate governance requirements by mandating that the annual report of a CP which has been approved by the General Meeting of Shareholders to be formalized into a notarial deed, and subsequently submitted to the Minister of Law through the SABH. This is a new requirement since the current practices does not have such a requirement.
Failure by a Capital Partnership (Persekutuan Modal) to comply with the obligation or to submit the annual report within the prescribed Submission Period of Annual Report may result in the imposition of sanctions by the MoLHR, in the form of a written warning and the blocking of system access in the SABH.
This new requirement may provide a solution to address the non-compliance of limited liability companies. It is noteworthy that due diligence practices reveal that the board members of many limited liability companies (particularly startups) often fail to fulfill their obligations to prepare the annual report, as mandated by the Company Law. Since there were no sanctions imposed, board members may perceive that non-compliance with regulations poses no significant harm. However, it is anticipated that this norm will be modified due to the new requirement under Regulation 49/2025.
Commentary
Regulation 49/2025 introduces several modifications to the process of establishment and amendment of a company’s articles of association. Notably, the regulation introduces the review process for submitting applications for the amendment of a company’s articles of association or its data. This new procedure may result in delays in the completion of mergers and acquisitions (M&A) transactions. Consequently, M&A agreements for future transactions may need to address this issue to prevent delays in the closing of the transactions.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
