A Limited Liability Company (“Companies”) is a legal entity in the form of a capital partnership established based on an agreement, conducting business activities with authorized capital divided into shares, as defined in Article 1 paragraph 1 of Law Number 40 of 2007 concerning Limited Liability Companies (“Law No. 40/2007”). The Law No. 40/2007 contains provisions related to fundamental aspects of companies, ranging from establishment, corporate organs, management, to dissolution and liquidation.
In the practice of legal entity administration, the Ministry of Law acts as the authority that regulates technical and administrative provisions through implementing regulations. Previously, these provisions were regulated in Regulation of the Minister of Law and Human Rights Number 21 of 2021 concerning Requirements and Procedures for Registration of Establishment, Changes, and Dissolution of Limited Liability Companies (“RM No. 21/2021”). However, since December 2025, this regulation has been declared invalid and replaced by Regulation of the Minister of Law No. 49 of 2025 (“RM No. 49/2025”).
One of the important changes in RM No. 49/2025 is the strengthening of the obligation for companies to submit annual reports, both in terms of substance, mechanism, and legal consequences. So, how are mandatory company reports regulated after the issuance of RM No. 49/2025 and what are the implications for companies?
| Law No. 40/2007 | RM No. 21/2021 | RM No. 49/2025 |
| Only regulates the Company’s annual reporting obligations to the General Meeting of Shareholders (“GMS”)
[Article 66 – 67] |
Only regulates financial reporting obligations to the Minister for Sole Proprietorships
[Article 19]
|
Regulating the obligation to submit annual reports to the Minister for Joint Stock Companies
[Article 16 clause (1)]
|
|
Obligations stipulated in the Notarial Deed include:
|
The change in status from a sole proprietorship to a partnership must be stated in a notarial deed.
[Article 17 clause (2)]
|
Approval of the annual report must be stated in a Notarial Deed.
[Article 16 clause (2)] |
Based on the comparison in the table above, RM No. 49/2025 contains significant and structural changes in the regulation of corporate annual reporting obligations. This provision emphasizes that annual reports are no longer positioned solely as a mechanism for internal accountability to the GMS, but also as an instrument of administrative compliance to the state that is integrated into the Legal Entity Administration System (“SABH”).
This regulation reflects a shift in the administrative approach from an event-based approach to a continuous compliance approach for limited liability companies. Thus, companies are no longer only burdened with administrative obligations at the time of establishment, change, or dissolution, but are also required to periodically report the condition and sustainability of the company to the state.
Regulation of Annual Report Requirements for Companies
RM No. 49/2025 explicitly requires joint stock companies to submit annual reports as part of their administrative compliance with the state. Pursuant to Article 16(1), the Board of Directors is required to submit the annual report, which has been reviewed by the Board of Commissioners, to the General Meeting of Shareholders no later than 6 (six) months after the end of the fiscal year. The annual report approved by the General Meeting of Shareholders must be recorded in a notarial deed.
This obligation marks an important change, as annual reports, which were previously internal, are now formalized through authentic deeds, requiring additional costs to pay for notary services.
Furthermore, Article 16 paragraphs (3) and (4) of Permenkum 49/2025 require the Board of Directors to submit the deed of approval of the annual report to the Minister of Law through a Notary to the electronically at SABH no later than 30 (thirty) days from the date the notarial deed was signed, along with supporting documents. The supporting documents that need to be attached include:
- Financial statements accompanied by comparisons with the previous fiscal year;
- Company activity reports;
- Reports on the implementation of corporate social responsibility;
- Details of issues that arose during the fiscal year that affected the company’s business activities;
- Reports on supervisory tasks carried out by the Board of Commissioners; and
- Names of members of the Board of Directors and Board of Commissioners along with details of their salaries, allowances, and honoraria.
With this arrangement, the annual report is no longer merely a form of internal accountability to the GMS, but has become an instrument of state administrative oversight of the transparency and sustainability of limited liability companies.
Risks and Sanctions for Violations of Company Annual Reporting Obligations
RM No. 49/2025 stipulates administrative sanctions for companies that do not submit annual reports or exceed the reporting deadline. Article 17 of RM No. 49/2025 regulates the forms of sanctions imposed on companies, namely administrative sanctions in the form of written warnings and blocking of access to the company’s SABH.
Written warnings are delivered through notifications on the company’s SABH when the company exceeds the reporting deadline. Meanwhile, sanctions in the form of blocking access to the SABH are imposed within 30 (thirty) days from the date the written warning is delivered through the SABH.
Companies subject to access blocking sanctions may submit a request to unblock their access to the Director General of General Administration through the SABH by attaching the Deed of Approval of the Annual Report and supporting documents as described in Article 16 paragraph (6) of RM No. 49/2025.
Implications of Violating the Company’s Annual Report Obligations
The blocking of SABH access as a sanction for violating the company’s reporting obligations raises questions regarding the implications for the company, including:
What are the legal implications for the company?
Blocking SABH results in the company losing access to perform corporate administrative services as a legal entity, such as submitting amendments to the articles of association, changes to company data, registering corporate actions, and submitting other legal notifications electronically. This condition places the company in a position of administrative non-compliance, even though the company still exists as a legal entity in civil law.
What are the implications for the company in terms of business?
Blocking access to SABH has the potential to hamper the company’s business activities. Where blocking SABH restricts the company from making changes to its board of directors and board of commissioners, shareholders, and capital structure, this may result in delays in business transactions, financing, and cooperation with third parties. In practice, financial institutions, investors, and business partners generally require up-to-date company data that is officially recorded in the Ministry of Law’s system, so blocking SABH can reduce the level of trust of business partners and hinder business activities.
What are the implications for the company in terms of corporate governance?
Non-compliance with annual reporting obligations can be viewed as negligence on the part of the Board of Directors in carrying out their duties to manage the company fully and responsibly as mandated by the Limited Liability Company Law based on the principles of good corporate governance. In the long term, this condition has the potential to cause internal and external disputes if the administrative delay causes losses to shareholders or third parties.
Conclusion
RM No. 49/2025 stipulates a new obligation for Limited Liability Companies to include their annual reports in notarial deeds and submit them to the Minister of Law through SABH. Regardless of the normative debate over the basis of its authority, this provision is now in effect and must be complied with.
Non-compliance risks administrative sanctions in the form of blocking access to SABH, which can hamper the company’s legal and business activities and undermine the confidence of investors and business partners. Therefore, companies need to be more orderly, proactive, and adaptive in fulfilling their annual reporting obligations as part of implementing good corporate governance.
References
Law Number 40 of 2007 concerning Limited Liability Companies
Regulation of the Minister of Law and Human Rights Number 21 of 2021 concerning Requirements and Procedures for Registration of Establishment, Amendment, and Dissolution of Limited Liability Companies
Regulation of the Minister of Law No. 49 of 2025 concerning the Requirements and Procedures for the Establishment, Amendment, and Dissolution of Limited Liability Companies
Author: Muhamat Yanuar Abidin, S.H.
Editor: Yohana Maranatha, S.H., M.Kn.