Directorate-General of AHU Finalizes Regulations on Blocking Dormant Companies

The Directorate-General of General Legal Administration (“Directorate-General”) is finalizing revisions to Regulation of the Minister of Law (“Minister”) and Human Rights No. 21 of 2021 on the Requirements and Procedures for Registration of Establishment, Amendment and Dissolution of Legal Entity of Limited-Liability Company (“Regulation 21/2021”). This legal instrument refines the online system for general legal administration services, particularly in the establishment of Limited Liability Companies (“PT”).

“So, this amendment to the regulation will ensure a more detailed process in verifying company documents and deeds before the establishment decree is issued, thereby avoiding false documents or General Meeting of Shareholders (“RUPS”) processes,” said Andi Taletting Langi, Director of Business Entities at the Directorate-General of AHU, Ministry of Law, to Hukumonline.

This amendment to the Regulation will also regulate in more detail the procedures for dissolving dormant and fictitious companies. In the future, companies will be required to report all financial and corporate activities annually.

“It's like a tax report, so we know whether the company is active or not. If they don't report or ignore it, we will block them,” he concluded.