Key Changes in the Business Entity Draft Bill

The Directorate-General of General Legal Administration (“AHU”) of the Ministry of Law (Kemenkum) is finalizing the Draft Bill on Business Entities (“Business Entity Draft Bill”). This framework is being drafted to replace colonial-era legal products.

“Transition. Some regulations are still old colonial Dutch East Indies products. The Commercial Code and the Civil Code. These will be withdrawn and tidied up here,” said Director-General of AHU, Widodo, to Hukumonline.

In addition, the Business Entity Draft Bill will also be harmonized with a number of laws, including Law No. 40 of 2007 on Limited-Liability Companies, as amended most recently by Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation (collectively referred to as “Law 40/2007”) to Law No. 16 of 2001 on Foundation, as amended most recently by Law No. 28 of 2004 (collectively referred to as “Law 16/2001”).

Currently, the Directorate-General of AHU is gathering input from various parties to be included in the Business Entity Draft Bill. One of them is related to beneficial ownership.

“We are currently preparing the concepts. Yesterday, we met with the Corruption Eradication Commission (KPK) and the Indonesian Financial Transaction Reports and Analysis Centre (PPATK). One of the inputs is to strengthen beneficial ownership,” said Widodo.