Presidential Regulation on Partnership
Introduction
Presidential Regulation Number 44 of 2016 on Partnership ("Perpres 44/2016") is a landmark regulation that governs the establishment and operation of partnerships in Indonesia. It repeals and replaces the previous Partnership Law (Law Number 1 of 1997), and introduces significant changes to the legal framework for partnerships in Indonesia.
Key Provisions of Perpres 44/2016
Perpres 44/2016 introduces several key provisions that modernize and clarify the legal framework for partnerships in Indonesia. These include:
- Definition of Partnership: Perpres 44/2016 defines a partnership as a legal entity formed by two or more persons who agree to contribute capital or other assets to a common enterprise and to share the profits and losses of the enterprise.
- Types of Partnerships: Perpres 44/2016 recognizes three types of partnerships: general partnerships, limited partnerships, and limited liability partnerships.
- Formation of Partnerships: Partnerships are formed by executing a partnership agreement. The partnership agreement must be in writing and must contain certain mandatory provisions, such as the name of the partnership, the purpose of the partnership, the contributions of each partner, and the distribution of profits and losses.
- Management of Partnerships: Partnerships are managed by the partners. The partners may appoint a manager or managers to handle the day-to-day operations of the partnership.
- Liability of Partners: In a general partnership, each partner is jointly and severally liable for the debts and obligations of the partnership. In a limited partnership, only the general partners are personally liable for the debts and obligations of the partnership. In a limited liability partnership, all partners have limited liability for the debts and obligations of the partnership.
- Dissolution of Partnerships: Partnerships are dissolved upon the occurrence of certain events, such as the death or withdrawal of a partner, the bankruptcy of a partner, or the expiration of the term of the partnership.
Benefits of Perpres 44/2016
Perpres 44/2016 provides several benefits to businesses and individuals who wish to form partnerships in Indonesia. These benefits include:
- Increased Flexibility: Perpres 44/2016 provides greater flexibility in the formation and operation of partnerships. Businesses and individuals can now choose the type of partnership that best suits their needs.
- Reduced Liability: Perpres 44/2016 reduces the liability of partners in limited partnerships and limited liability partnerships. This makes it more attractive for businesses and individuals to invest in partnerships.
- Improved Dispute Resolution: Perpres 44/2016 provides a clear framework for resolving disputes between partners. This helps to ensure that partnerships are operated in a fair and equitable manner.
Conclusion
Perpres 44/2016 is a significant improvement over the previous Partnership Law. It modernizes and clarifies the legal framework for partnerships in Indonesia, and provides several benefits to businesses and individuals who wish to form partnerships.
