Is It Allowed for Company to Have More Than One Business Activities?

To conduct business activities in Indonesia, generally the form of business activities established is a Limited Liability Company (PT). Based on Law No. 40 of 2007 concerning Limited Liability Companies ("UU PT") states that in the Company's Articles of Association, one of the things that must be contained is the objectives as well as the Company's business activities. Based on the explanation of Article 18 UU PT, the objectives are the main business of the company and business activities are activities carried out by the Company in order to achieve its aims and objectives, which must be clearly detailed in the articles of association, and these details must not conflict with the articles of association.

In putting the objectives of the Company, please note that Indonesia is currently implementing Risk-Based Business Licensing in accordance with Government Regulation No. 5 of 2021 concerning the Implementation of Risk-Based Business Licensing ("PP No. 5/2021"). Based on article 6 of PP No. 5/2021, what is included in the Risk-Based Business Licensing is the Indonesian Standard Classification Code of Business Field ("KBLI") and its title. Based on the Regulation of the Central Bureau of Statistics No. 2 of 2020 concerning the Standard Classification of Indonesian Business Fields ("BPS Regulation No. 2/2020"), KBLI is to classify Indonesian economic activities/activities that produce products/outputs, both in the form of goods and services, based on business fields used as standard references and tools for coordination, integration, and synchronization of statistical implementation. Thus, business actors must determine KBLI related to business activities to be undertaken.

Based on the regulations mentioned above, there is no prohibition for business actors to have more than one business activity. However, it should be noted that there are several KBLI that are not allowed to be combined, which are as follows:

• Single Purpose KBLI (Based on Article 15 letter f of the Head of BKPM Regulation No. 4 of 2021 concerning Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities) – It is a KBLI that cannot be combined with other KBLI, so that business actors can only carry out one business activity.

Example: KBLI 50132 - Sea Freight Domestic Port Waters for Goods, is a KBLI that cannot be combined with other KBLI.

• KBLI Wholesale Trade and Retail Trade (Based on Article 55 paragraph (1) of PP No. 29 of 2021 concerning the Implementation of the Trade Sector) – That wholesale trade is prohibited from carrying out retail sales.

Example: KBLI 46632 - Wholesale Trade in Glass cannot be merged with 47522 - Retail Trade in Glass.

• Certain Mining KBLI (based on the Letter of the Director General of Mineral and Coal of the Ministry of Energy and Mineral Resources to the Deputy PIPM of the Ministry of Investment / BKPM Number 1201 / MB.02 / DJB / 2021 dated May 21, 2021).

Example: KBLI 09900 - Supporting Activities of mining and other quarrying cannot be combined with 23941 - Cement Industry.

The brief description above is an overview of the provisions of the Company's business activities. If you are interested in knowing more about it, Suria Nataadmadja & Associates Law Office can help you.