START NOW – The expiration of the deed of establishment of a PT is an important issue that every entrepreneur needs to know.

Furthermore, you also need to know how to follow up on the issue of expiration of the deed of establishment

The Importance of the Deed of Establishment of a PT

The deed of establishment of a PT (Limited Company) is an official document that marks the formation of a company.

It is an essential legal foundation for every company and contains basic information about it, such as:

• Company name
• Company objectives
• The amount of authorized capital,
• The founders’ identity
• etc

In addition, the deed of establishment is legal proof that the company has been officially registered with Kemenkumham 

That means it has official status as a legal entity. So, every business activities it conducted are legitimate and recognized by law.

However, you should know that there is a date of expiration of the deed of establishment. Without a valid deed, a company will face some difficulties, such as:

• Can not opening a bank account
• Can not signing contracts
• Can not applying for a business license.
• Etc.

The Expiration of The Deed of Establishment of a PT

The expiration of the PT deed of establishment is regulated by Law Number 40 Year 2007 on Limited Liability Companies.

Generally, this expiration period ranges from 5 to 10 years, depending on the type of changes required.

The deed will be considered expired if the company doesn’t make changes or authorization within the specified time.

Also, there are several factors that can cause the PT deed of establishment to expire, include:

Not Updating Data

It is important for companies to carry out regular updates and ensure that all data is recorded accurately.

For example, if the PT moves, but doesn’t change the address in the deed, this could cause serious legal problems.

Inaccurate information may result in administrative sanctions, loss of legal entity status, or difficulties in carrying out daily operations.

Not Holding a General Meeting of Shareholders (GMS)

The General Meeting of Shareholders (GMS) is an important forum for strategic decision making in a PT.

It serves as a forum to discuss various issues, including changes to the deed of establishment, which require shareholder approval.

If the GMS is not carried out in accordance with applicable provisions, the decisions taken can be considered invalid. 

This can have serious impacts on the continuity of the company. Therefore, it is important for companies to hold GMS regularly and according to procedures.

Not Complying with Legislation

Every company must comply with applicable regulations, such as taxation and licensing. Otherwise, the company’s deed of establishment may be declared void. 

Therefore, the company must keep abreast of relevant legal developments, as well as conduct regular internal audits.

Thus, the company can avoid potentially costly legal issues.

Implications of the Expiration of the Deed of Establishment of a PT

The expiration of the deed of establishment can cause various consequences for a PT, including:

Loss of Legal Entity Status

One of the most obvious impacts of an expired deed of establishment is PT will loose its legal entity status.

This means the company is no longer legally recognized and will not be able to carry out its business activities.

This can result in huge financial losses and can even threaten the survival of the company itself.

Impact on Contracts and Agreements

If the deed of establishment has expired, all contracts and agreements made by the company may be considered invalid.

This has a serious impact on the reputation and operations of the business, and even cause financial losses. 

The reason is, the third party may not recognize the obligations or rights stipulated in the agreement. 

Administrative Sanctions

The expiration of the deed of establishment that are not addressed promptly may expose the PT to administrative sanctions.

This includes fines and prohibitions on conducting business activities until the matter is resolved.

Difficulty in Decision Making

If the deed of establishment is invalid, shareholders won’t be able to conduct a valid GMS to make important decisions.

Steps to Avoid Expiration of The Deed of Establishment of a PT

To keep the deed of establishment remain valid, PT  needs to take several preventive steps, including:

Regular Updates

Companies need to regularly update their deed of establishment, especially when there are major changes occur. For example: changes of authorized capital or organizational structure.

This is to maintain the legality of the company and provide certainty to shareholders and third parties.

Implementation of GMS

Make sure you make all important company decisions, such as make strategic decisions and develop future business plans, through GMS. 

This is important to ensure that all company decisions are valid and legally binding. All decisions taken at the GMS must be recorded in valid minutes.

Consultation with a Notary or Legal Expert

Consult with a notary or legal expert will be useful to ensure every aspects of the comply with applicable regulations.

They can provide advice on updating the deed of establishment and help avoid legal problems in the future.

They can also help you follow up the issue of expiration of the deed of establishment of a PT properly.

By consulting regularly, companies can identify and address potential legal risks early.

Comply with Laws and Regulations

Companies must always comply with applicable regulations. This includes various aspects, such as tax regulations, business licenses, and other relevant provisions.

It is not only to protects companies from legal sanctions, but also to build a positive reputation. 

Expiry Date Monitoring

It is strongly recommended that companies should create a reminder to monitor the expiration date of the deed of establishment.

Having a good reminder system will make it easier for company to monitor and maintain every aspects of its operations. 

The renewal actions must be taken before the expiration period runs out to avoid unwanted legal consequences.

If you need assistance to solve the issue of an expiration of the deed of establishment,  just contact Start Now.