In legal practice, business actors often interpret the revocation of a business license as the end of a company’s existence. Many directors, creditors, and business partners often assume that a company whose business license has been revoked no longer has legal entity status. This view is incorrect and inconsistent with the provisions of Law Number 40 of 2007 concerning Limited Liability Companies in conjunction with Law Number 6 of 2023 concerning the Stipulation of Government Regulation instead of Law Number 2 of 2022 concerning Job Creation. This is in line with the risk-based business licensing regime; business licenses are submitted and managed through the Online Single Submission (OSS) system.
Revocation of Company Business Licenses
Company Business Licenses or Business Identification Numbers (NIB) are business licenses (PB) granted to Business Operators to start and run their businesses and/or activities as stipulated in Government Regulation Number 28 of 2025 concerning the Implementation of Risk-Based Business Licensing. Business Licensing covers several sectors, namely marine and fisheries, agriculture, forestry, energy and mineral resources, nuclear energy, industry, and other sectors. In addition, if a company wishes to improve the investment ecosystem and business activities in other risk-based business sectors, a Risk-Based Business License (PBBR) is required, such as for the development of the creative economy sector; geospatial information; employment; cooperatives; investment; electronic systems and transactions; and other sectors. The Company’s Business License or NIB in carrying out more than one business activity must be based on the classification code regulations set by government agencies.
The revocation of a business license is a form of administrative sanction for non-compliance with licensing obligations based on a business licensing approach and/or a risk-based approach to business licensing. In this case, if a business license is revoked by a certain Authority, the Company loses its legitimacy to carry out the revoked business activities, but this does not mean that the Company cannot operate in carrying out other business activities.
Violations Leading to Business License Revocation
Several violations leading to the revocation of the Company’s business license based on the provisions of Law Number 6 of 2023 concerning the Stipulation of Government Regulation instead of Law Number 2 of 2022 concerning Job Creation are as follows:
- The company does not fulfill its business licensing and risk-based business licensing commitments through the OSS-RBA system and does not meet the basic licensing requirements according to the level of business activity risk.
- The company has submitted inaccurate and incomplete data or documents in its business license applications and updates through the OSS-RBA system, such as discrepancies in business location, shareholder identity, tax records, capital structure, operational activities, and other data.
- The company conducts business activities that are not in accordance with the Indonesian Standard Industrial Classification (KBLI) as stated in the NIB and business licenses owned.
- The company conducts business activities that have a serious impact on safety, health, the environment, and/or the public interest, resulting in the competent authority imposing sanctions in the form of revocation of business licenses and other violations as referred to in Law Number 6 of 2023.
Therefore, with reference to the provisions of the law, the Company is required to comply with and implement all provisions governing the Company’s activities and business fields in accordance with the business license submitted through the OSS system.
Revocation of a Business License Does Not Result in the Revocation of a Company’s Legal Entity Status
Under the risk-based business licensing regime through the OSS-RBA system, revocation of a business license is an administrative sanction and does not revoke the legal entity status of a Company that arose upon approval by the Minister of Law of the Republic of Indonesia. Since such approval, the Company has existed as a legal entity separate from its founders, remains bound by existing legal relationships, and continues to bear rights and obligations towards creditors, business partners, and third parties.
However, revocation of a business license does not automatically result in the dissolution of the Company. The provisions of Article 142 paragraph (1) letter f of the PT Law do open up the possibility of dissolution of the Company due to revocation of a business license that requires liquidation. Based on the explanation of this article, there are limiting restrictions, namely the revocation of a license that does not allow the Company to carry out other business activities, such as a banking or insurance business license. Thus, the dissolution of the Company still requires a separate legal basis and can only be carried out if the revocation of the business license meets the criteria specified by law.
Legal Status of Companies that Must be Dissolved due to Revocation of Business Licenses
Revocation of a business license resulting in the dissolution of a company occurs when that license is the only business license that legally precludes the company from conducting any other business activities, as stipulated in the company’s articles of association, which limit the company’s activities to only one specific type of business. In such circumstances, the revocation of the business license means that the Company no longer has a legal basis to carry out its business activities, thereby triggering the provisions regarding dissolution, liquidation, and termination of the Company’s legal entity status in accordance with Law Number 40 of 2007.
Mechanism for the Return or Reactivation of Revoked Business Licenses
The revocation of business licenses or NIBs is essentially due to the Company’s non-compliance with licensing obligations as stipulated in laws and regulations.
The legal steps that need to be taken to restore or reactivate the Company’s business license are to first identify the basis for the revocation of the business license as stated in the decision of the competent authority. The basis for revocation is a reference for making improvements, fulfilling commitments, or adjusting business activities in accordance with the level of risk and the Company’s field of business.
After fulfilling all violated obligations, the Company can submit an application for reactivation or issuance of a business license through the OSS-RBA system in accordance with the provisions of Law No. 6 of 2023 and its implementing regulations. The application must be accompanied by data, documents, and statements of compliance with the required standards that are correct and complete.
If the competent authority assesses that the Company meets all business license requirements, the business license will be reactivated or reissued in accordance with the OSS mechanism. As long as the business license has not been reactivated, the Company is prohibited from carrying out business activities that require such a license, even though the Company’s legal entity status remains in effect.
Conclusion
The revocation of a company’s business license does not result in the termination of the company. The status of the company remains valid since its approval by the Minister of Law of the Republic of Indonesia and is not revoked by administrative sanctions in the form of revocation of business licenses in certain sectors under the risk-based business licensing regime. The revocation of a business license only terminates the Company’s legality to carry out certain business activities and does not remove the Company’s position as a legal entity that continues to bear rights and obligations towards third parties and continues to carry out other business activities. The dissolution of the Company may occur if the revocation of the business license meets the criteria of Article 142 paragraph (1) letter f of the PT Law, namely the revocation of a license that legally closes all possibilities for the Company to carry out business activities and requires liquidation based on the provisions of laws and regulations.
References
Law Number 6 of 2023 concerning the Stipulation of Government Regulation instead of Law Number 2 of 2022 concerning Job Creation
Law Number 40 of 2007 concerning Limited Liability Companies
Government Regulation Number 28 of 2025 concerning the Implementation of Risk-Based Business Licensing
Author: Lasta Elfrida Sinaga, S.H.
Editor: Yohana Maranatha, S.H., M.Kn.