Legal Literacy - Some of us are familiar with the term business entity such as PT, Firma, or CV. Such forms of companies are established with different terms and conditions under Indonesian law, but the main objective remains the same, namely to seek profits from their business. Then what are the forms of business entities according to law and the requirements for their formation? See the explanation below to find out more.

Definition of Business Entity

Referring to Law Number 3 of 1982 concerning Mandatory Company Registration (UU WDP), a company or business entity is defined as any form of business that carries out any type of business that is permanent and continuous and is established, works and is domiciled in the territory of the Republic of Indonesia, which aims to obtain profits and/or profits.

Meanwhile, another definition of a company can also be found in Law Number 8 of 1987 concerning Company Documents, where in the Law a company is defined as any form of business that carries out activities in a fixed and continuous manner with the aim of obtaining profits or profits, whether carried out by individuals, business entities in the form of legal entities and non-legal entities, and which are established in the territory of the Republic of Indonesia.

From these two definitions, it can be said that the definition contained in the UU WDP is more complex because it concerns individual companies, legal entities, and non-legal entities. In short, a company or business entity is any type of entity that is established and carries out its activities to obtain profits or profits. Business entities are further divided into 3 classifications, namely private business entities (consisting of Civil Partnerships, Firms, Limited Partnerships, and Limited Liability Companies), cooperative business entities, and State-Owned Enterprises or BUMN (such as Public Companies or Perum, and Limited Liability Companies). The following are examples of types of business entities and the requirements for their formation.