Ask HN: Suitable company structure for single founder looking for angels, non-US
5 comments
Hi wiradikusuma,
In Indonesia, the only legal entity for a single founder is sole propriatorship. Even a CV would require a partner.
Anyway, if you are approaching for an investment (not a loan) the only possible legal structure in Indonesia is an LLC/PT. A sensible investor would never invest in a CV since then they can not sell their stake without consent from all other stakeholders. Also, I believe there is a market cap of 1B rupiah which does not apply to PT.
Your best bet would be to start a PT with a "borrowed" name i.e. your mom or even better, find a real partner to be a co-founder. Starting a business is hard, if you can get someone to share the burden from you, that would be REALLY helpful.
Disclaimer: I am not a lawyer so do not assume everything I write is 100% correct. Do your job and consult an expert.
In Indonesia, the only legal entity for a single founder is sole propriatorship. Even a CV would require a partner.
Anyway, if you are approaching for an investment (not a loan) the only possible legal structure in Indonesia is an LLC/PT. A sensible investor would never invest in a CV since then they can not sell their stake without consent from all other stakeholders. Also, I believe there is a market cap of 1B rupiah which does not apply to PT.
Your best bet would be to start a PT with a "borrowed" name i.e. your mom or even better, find a real partner to be a co-founder. Starting a business is hard, if you can get someone to share the burden from you, that would be REALLY helpful.
Disclaimer: I am not a lawyer so do not assume everything I write is 100% correct. Do your job and consult an expert.
You guys have the same business entities... did not know that! Here in The Netherlands we also have the BV (bijzondere vennootschap). It's a seperate legal entity, with limited liability.
As said by dirkdeman, there are other possible structures (also "vereniging onder firma", etc.)
In any case, investment are investments, not debt; while a proprietor in NL may (depending on the structure) be personally on the hook for any unpaid bills (to e.g. suppliers), you have to get really sleazy before the investors can demand their money back.
Talk with someone who knows Indonesian law, though. IANAL, and the Dutch and Indonesian laws are probably not exactly the same anyway.
In any case, investment are investments, not debt; while a proprietor in NL may (depending on the structure) be personally on the hook for any unpaid bills (to e.g. suppliers), you have to get really sleazy before the investors can demand their money back.
Talk with someone who knows Indonesian law, though. IANAL, and the Dutch and Indonesian laws are probably not exactly the same anyway.
^Start a CV, and be prepared to lose my house if I can't pay back the investor.
This makes it sound like a loan not an investment. If you have to pay him back, why not just go get a loan?
This makes it sound like a loan not an investment. If you have to pay him back, why not just go get a loan?
Ok, I'm a bit exaggerating, but such thing might happen here. Anyway, here's one article I found explaining the differences between NV ("PT" or Perseroan Terbatas) and CV. It's written in Indonesian thus Google Translate is used:
http://translate.google.com/translate?sl=id&tl=en&js...
http://translate.google.com/translate?sl=id&tl=en&js...
Apparently CV also cannot be one man show. I'm so clueless, I'm sorry. I really don't know how to map my country's company structures with the ones in US sigh.
- Naamloze vennootschap (NV) http://en.wikipedia.org/wiki/Naamloze_vennootschap - Commanditaire vennootschap (CV, limited partnership) - And some others which are not contextual with my question (such as Sole Proprietorship).
Now, many people in Indonesia think NV is similar with Corporation, in the sense that it's a legal entity, has the concept of shares and limited liability. BUT... it has to be formed "at least two shareholders are willing to invest capital" (http://business.belgium.be/en/managing_your_business/setting_up_your_business/company_types/public_limited_company/, from Google). CV allows one man show, but it's not limited liability, and converting it to NV later on can be tedious.
The problem is, I'm a single founder and currently approaching an angel investor to invest in my idea using convertible debt. Ideally, like in US(?), I can just setup a company, get the money, and life goes on. But since we don't have such Corp/LLC thing, I could:
- Start a CV, and be prepared to lose my house if I can't pay back the investor. - Start a NV, by asking my mom to be my partner with minimum share allowed. - Or, how?
And, have I told you that the investor is a foreigner (non-Indonesian)?
Note: I know it's a bit silly to ask this in US-centric community, but I'm pretty sure there are lots of non-US citizen here who might have the same dilemma with me.