The Effect of Licensing through Online Single Submission (OSS) on
the Establishment of the Company
R. Murjiyanto, Devi Andani
Faculty of Law, Janabadra University, Jl. Timoho II No. 40, Yogyakarta, Indonesia
Keywords: Company, Licensing, Integrated, Establishment, OSS.
Abstract: The business actor must obtain a permit in the form of an agreement that is stated in the form of a letter /
decision or fulfillment of the requirements and / or commitment to start and run a business and / or activity.
With this agreement, the business actor is given a Business Registration Number (NIB), namely the identity
of the Business Actor issued by the OSS Institution after the Business Entity registers through Online Single
Submission (OSS). The Business Actor must enter the business data when establishment the company to be
able to access the OSS in the AHU Director General of the Ministry of Law and Human Rights, in accordance
with the Indonesian Standard Industrial Classification (KBLI). The method used is normative research
methods, by reviewing several documents, applicable regulations, and company establishment documents.
The conclusions of the problems are as follows: 1. Enforcement of integrated business licensing services
through on line or OSS has an effect, that each company establishment must enter company data specifically
in the business field of the AHU Director General of the Ministry of Law and Human Rights, through a
process of ratification or registration, namely for business entities in the form of legal entity is using
ratification, while a business entity that is not a legal entity is using registration. 2. Business actors in
determining business fields for business activities carried out in the business establishment process must
adjust to the Indonesian Standard Industrial Classification (KBLI) as stipulated in the Regulation of the Head
of the Central Statistics Agency. 3. For companies that have been established before the OSS is applied, they
must adjust their activities according to the business fields listed in KBLI 2017 by amending their articles of
association, especially concerning the purpose of putting business data into the Public Law Administration
Director General of the Ministry of Law and Human Rights’ system and registering to OSS Institution to
obtain a company registration number (NIB).
1 INTRODUCTION
In order to improve the national economy through
business development efforts in all fields, the
government has issued regulations relating to
business licensing, by simplifying business licensing
through Government Regulation Number 24 of 2018
concerning Electronic Integrated Licensing Services
or Online Single Submission (OSS). So far, business
actor in managing permits have been done manually
by knocking on doors one by one starting from the
district / city Integrated One-Stop Services or in
Indonesia is called as PTSP, provincial PTSP, to the
central PTSP (Investment Coordinating). The one-
stop service policy which aims to make it easier for
the public to take care of all needs related to licensing
is considered not optimal.(Bagijo, 2010)
The ease of licensing services is not only for the
interests of domestic investment business activities
but is also intended to facilitate foreign investors to
run their businesses domestically in the form of
foreign investment, which licensing problem has been
a problem that has hampered the establishment of
businesses. Some incentives and conveniences for
foreign investors who will invest their capital in a
country are increasingly mixed attractively. The
juridical sector is no exception, which is also
demanded to not become a hindrance, or not to be left
behind by the juridical sector in competing
countries.(Fuady, 1996)
Through this online integrated business licensing
regulation, business licensing is carried out online
through a single system called OSS. This policy is
expected to provide convenience and accelerate
business licensing, while at the same time increasing
the development of investment and business which in
Murjiyanto, R. and Andani, D.
The Effect of Licensing through Online Single Submission (OSS) on the Establishment of the Company.
DOI: 10.5220/0009197600050011
In Proceedings of the 2nd International Conference on Applied Science, Engineering and Social Sciences (ICASESS 2019), pages 5-11
ISBN: 978-989-758-452-7
Copyright
c
2020 by SCITEPRESS Science and Technology Publications, Lda. All rights reserved
5
itself will increase business growth and the national
economy. Business Licensing is registration that is
given to Business Actors to start and run a business
and / or activity and is given in the form of an
agreement outlined in the form of a letter / decision
or fulfillment of requirements and / or commitments.
With registration to obtain this agreement, the
business actor is given a company registration
number, hereinafter abbreviated as NIB, is the
identity of the Business Actor issued by the OSS
Institution after the Business Actor registers.
In the management of licensing registration
through OSS, it is integrated with several agencies
which are related on business actor’s data, including
company data at the Public Law Administration
Director General of the Ministry of Law and Human
Rights, population data at the Ministry of Home
Affairs of Director General of Population and Civil
Disputes, Tax Identification Number at the Director
General of Taxes even labor data that must be
registered with the Social Insurance Administration
Organization or in Indonesia is called as BPJS.
To be able to access OSS, company data is needed
at the Public Law Administration Director General of
the Ministry of Law and Human Rights, so that all
business actors must enter company data either
through endorsement or registration, depending on
the legal status of the company which is a legal entity
or not and requires approval or registration. So far,
there are several forms of business entities, both legal
entities such as Limited Liability Companies as
stipulated in Law number 40 of 2007, while forms of
business that are not legal entities such as the form of
partnership (maatschap)(Prasetya, 1995) as the main
federation form which are regulated in the Civil Code,
while General Partnership and Limited Partnership
are regulated in the Code of Business Law.
In addition, when applying for registration or
ratification of legal entities through the Public Law
Administration Director General of the Ministry of
Law and Human Rights, data must be put in line with
the Indonesian Standard Industrial Classification
(KBLI) as stipulated in the Central Bureau of
Statistics Regulation number 95 of 2015 concerning
Indonesian Standard Industrial Classification (KBLI)
as has been amended by Regulation of the Head of the
Central Bureau of Statistics number: 19 of 2017,
hereinafter referred to as KBLI 2017. Thus the
business actors who will carry out a business activity
in their establishment must adjust KBLI 2017 so that
data on business fields registered with the Public Law
Administration Director General can be accessed
through OSS when managing business permits.
In accordance with the consideration of
regulations concerning integrated business licensing
services, it is intended to facilitate business activities
and development, as well as facilitate the business
establishment process. From the description of
business establishment before the issuance of the
regulation on business licensing through OSS, the
obligation to approve business entities of legal
entities through the Public Law Administration
Director General of the Ministry of Law and Human
Rights only applies to business entities with legal
entities, especially Limited Liability Companies.
However, but with the enactment of business
licensing services through OSS, this requires that
businesses that are not legal entities such as alliances
must also be registered through the Public Law
Administration Director General of the Ministry of
Law and Human Rights. This is so that company data
can be accessed through OSS Institutions when
submitting licensing applications through OSS with
business fields that are in accordance with ISIC 2017.
From this description, several problems can be stated
as follows: 1.What is the effect of applying business
licensing services through on line or OSS on business
establishment procedures? 2. How do business actors
determine the business sector for the business
activities carried out in the business establishment
process? What about the companies that have been
established before the enforcement of the OSS?
2 RESEARCH METHODS
We strongly encourage authors to use this document
for The method used is normative research methods,
by reviewing several documents, applicable
regulations, and documents on the registration
process and / or endorsement of the establishment of
the company, including:
1. Presidential Regulation Number 91 of 2017
concerning the Acceleration of Business
Execution
2. Government Regulation of the Republic of
Indonesia Number 24 of 2018 concerning
Electronic Integrated Business Licensing Services
3. Regulation of the Minister of Law and Human
Rights of the Republic of Indonesia Number 17 of
2018 concerning Registration of the Limited
Partnership, General Partnership, and Limited
Liability Partnership
4. Regulation of the Minister of Law and Human
Rights of the Republic of Indonesia number 1 of
2016 concerning Amendments to Regulation of
the Minister of Law and Human Rights of the
ICASESS 2019 - International Conference on Applied Science, Engineering and Social Science
6
Republic of Indonesia number 4 of 2014
concerning Procedures for Submitting Requests
for Ratification of Legal Entities and Approval of
Amendments to Articles of Association and
Submission of Notices of Amendments to Articles
of Association and Amendments to Data of
Limited Liability Companies.
5. Regulation of the Head of the Central Bureau of
Statistics number: 95 of 2015 concerning the
Indonesian Standard Industrial Classification
(KBLI)
6. Regulation of the Head of the Central Bureau of
Statistics number: 19 of 2017 concerning
Amendments to the Regulation of the Head of the
Central Bureau of Statistics number: 95 of 2015
concerning Indonesian Standard Industrial
Classification (KBLI)
By analyzing in depth several regulations relating
to business licensing services through electronic or
Online Single Submission (OSS), and supported by
data in the form of registration process documents
and / or authorization of establishment of companies,
it can be produced conclusions that can be accounted
for academically.
3 RESULT AND DISCUSSIONS
3.1 The Effect of the Application of
Business Licensing Services
through on Line or OSS on the
Business Establishment Procedure
In order to achieve a prosperous society, a mechanism
must be created to facilitate business activities that
can increase the economic growth of the community.
One of which is ease and simplification in the field of
business licensing. By providing convenience and
simplification of business licenses, it is hoped that
business activities can grow and develop so that it can
increase the economic growth of the community and
by itself will improve the welfare of the community.
Economic development needs to be developed to
create jobs, enhance sustainable economic
development, increase national technological
capacity and capabilities, and encourage people's
development and realize public welfare in a
competitive economic system.(Bagijo, 2010)
Some countries implement licensing intended to
provide protection to the public and business actors
themselves. Like the provisions of the regulations
imposed in the United Kingdom, Its further
recommendations went on to include creation of
personal and premises licences, exible opening hours,
consistent nationwide conditions to protect the public
from nuisance and disorder, and greater controls and
sanctions for authorities dealing with liquor licensing.
It also, controversially, suggested that liquor
licensing should be transferred from magistrates to
local authorities.(Poppleston, 2001)
Licensing in company activities is very important,
because a permit owned by a company will give trust
to the third parties or the consumers. The licensing
effect was demonstrated in various consumer
contexts focusing on consumers’ self-
behaviors.(Toder-Alon et al., 2017)
In connection with efforts to increase business
ventures, the government has issued a number of new
regulations, including Presidential Regulation
Number 91 of 2017 concerning the Acceleration of
Business Execution. One of the considerations of
issuing the Presidential Regulation was stated in its
consideration that business licenses issued by
ministries / institutions and regional governments to
start, implement and develop business activities need
to be reorganized in order to become a supporter and
not otherwise become an obstacle to the development
of business activities. In order to accelerate and
simplify business services, need to implement the use
of information technology through an Integrated
Electronic Integrated Business Licensing System
(Online Single Submission) or OSS.
Then followed up with the issuance of
Government Regulation of the Republic of Indonesia
Number 24 of 2018 concerning Business Licensing
Services to be Integrated Electronically. One of the
considerations for issuing the Government
Regulation is stated in its consideration, that in the
context of accelerating and increasing investment and
business, it is necessary to apply Business Licensing
Services to be integrated electronically. Article 1
point 5 states that Electronic Integrated Business
Licensing or Online Single Submission, hereinafter
abbreviated as OSS, is Business Licensing issued by
OSS Institutions for and on behalf of ministers, heads
of institutions, governors, or regents / mayors to
Business Executors through integrated electronic
systems.
Business Licensing is obtained through
registration given to the Business Actor to start and
run a business and / or activity and is given in the form
of an agreement as outlined in the form of a letter /
decision or fulfillment of requirements and / or
Commitments. Business Actors are individual or non-
individual business actors who conduct business and
/ or activities in certain fields. Business License is a
permit issued by OSS Institutions for and on behalf of
The Effect of Licensing through Online Single Submission (OSS) on the Establishment of the Company
7
ministers, heads of institutions, governors, or regents
/ mayors after the Business Entity registers and starts
a business and / or activity prior to commercial or
operational implementation by fulfilling the
requirements and / or Commitment. Commercial or
Operational Permits are permits issued by OSS
Institutions for and on behalf of ministers, heads of
institutions, governors, or regents / mayors after the
Business Entity obtains a Business License and for
conducting commercial or operational activities by
fulfilling the requirements and / or Commitments.
Commitment is a statement of Business Actors to
fulfill the requirements of a Business License and / or
Commercial or Operational Permit. Management
Institutions and OSS Organizers, hereinafter referred
to as OSS Institutions, are non-ministerial
government institutions that administer government
affairs in the field of investment coordination. The
Company Registration Number, hereinafter
abbreviated as NIB is the identity of the Business
Actor issued by the OSS Institution after the Business
Actor registers, which includes the registration of
business and / or activities by the Business Actor
through OSS.
Company Registration Certificate hereinafter
abbreviated as TDP is a letter of approval issued by
the OSS Institution to Business Actors who have
registered. The OSS Institution issues NIB after the
Business Actor registers through filling in the
complete data and obtaining the Tax Identification
Number. This NIB is a business identity and is used
by Business Actors to obtain a Business License and
Commercial or Operational Permit, including the
fulfillment of the requirements for Business Licenses
and Commercial or Operational Permits. NIB is valid
as long as the Business Actor runs his business and /
or activities in accordance with the provisions of the
legislation.
The NIB also applies as a Company Registration
Certificate (TDP) as referred to in laws and
regulations in the field of company registration
certificate (as stipulated in the Law Number 3 of 1982
concerning the Company Registration Requirement).
The NIB is an endorsement of the TDP valid for the
term of the NIB. NIB also applies as an API as
referred to in laws and regulations in the field of trade,
and the NIB also applies as customs access rights as
referred in legislation in the customs sector.
Business licenses must be owned by business
actors who have obtained NIB, in accordance with
applicable regulations. NIB can be revoked and
declared invalid by OSS Institutions in case: Business
Actors conduct business and / or activities that are not
in accordance with NIB, and / or declared null or
invalid based on a court decision that has permanent
legal force.
The types of business licenses consist of:
Business Licenses, and Commercial or Operational
Licenses. Applicants for Business Licensing are
submitted by: Individual Business Actors and Non-
Individual Business Actors.
Compared to individual businesses, business
activities in the form of business entities will be easier
to develop with greater capital support, because it
involves several parties. The number of traders as an
individual company that aims to obtain profits that are
generally used to fulfill their daily living decreases
annually compared to companies such as Limited
Liability Company, Cooperatives, Limited
Partnership and General Partnership. This shows that
the establishment of an individual company is not so
passionate compared to the establishment of a
business entity.(Hasbi, 2016) Business entities that
carry out business activities in the economic field
have certain forms, such as trading companies,
General Partnership, Limited Partnership, Limited
Liability Companies, Public Companies,
cooperatives.(Kansil, 1996)
In carrying out a business, entrepreneurs need a
place to be able to act in legal actions and interact.
The choice of type of business or legal entity that will
be used as a means of business depends on the needs
of its founders.(Amanda et al., 2018)
Establishment of Business Entity & NIB
To be able to access the OSS in order to obtain an
NIB, the business form that is established must be
authorized and / or registered electronically (on Line)
through SABH to ratify the establishment of a legal
entity business entity or SABU to register the
establishment of a business entity rather than a legal
entity at the Public Law Administration Director
General of the Ministry of Law and Human Rights.
Ratification of the establishment of a Legal Entity
Company such as a Limited Liability Company (PT)
based on the provision of law which regulates the
form of business concerned through the Legal Entity
Administration System (SABH) at the Public Law
Administration Director General of the Ministry of
Law and Human Rights. Whereas registration of
establishment of a business entity which is not a legal
entity such as
Limited Partnership, General Partnership and
Civil Partnership is submitted by the Applicant to the
Minister through the Business Entity Administration
System (SABU) at the Public Law Administration
Director General of the Ministry of Law and Human
Rights.
ICASESS 2019 - International Conference on Applied Science, Engineering and Social Science
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Both the establishment and amendment to the
articles of association must be stated in a notary deed,
and an approval for a legal entity company or
registration for a company that is not a legal entity
which is submitted to the Ministry of Law and Human
Rights through an electronic system (on line). The
form of a partnership in Indonesia has not yet been
considered a legal entity (Hadhikusuma, 1996), so the
founding process does not require endorsement, but
rather registration.
The Limited Partnership (commanditaire
vennootschap) is a Limited Partnership that has been
registered with the Central Government. Registration
of Limited Partnership (commanditaire
vennootschap) to the Government includes
registration of deed of establishment, amendment to
the articles of association and dissolution of the
Limited Partnership (commanditaire vennootschap)
by the ministry that administers legal affairs.
General Partnership (venootschap onder firma) is
a General Partnership (venootschap onder firma) that
have been registered to the Central Government.
Registration of General Partnership (venootschap
onder firma) to the Central Government includes
registration of deed of establishment, amendment to
the articles of association and dissolution of the
General Partnership (venootschap onder firma) by the
ministry that administers legal affairs.
The civil partnership is a civil partnership which
has been registered to the Central Government.
Registration of a civil partnership to the Central
Government includes registration of a civil
partnership deed, amendment to the constitution of a
civil partnership, and the dissolution of a civil
partnership by the ministry that administers legal
affairs.
Application for registration of establishment of
Limited Partnership, General Partnership, and Civil
Partnership is submitted by the Applicant to the
Minister through the Business Entity Administration
System (SABU), by first ordering the name of the and
making a deed of establishment.
Limited Partnership, General Partnership, and
Civil Partnership that have been registered in the
District Court based on laws and regulations, within
1 (one) year after the enactment of this Ministerial
Regulation is obliged to register the registration in
accordance with the provisions of this Ministerial
Regulation. Registration of the registration is allowed
to use a name that has been used legally by the
Limited Partnership, General Partnership, and Civil
Partnership that has been registered in the Business
Entity Administration System.
From the description of business establishment
before the issuance of the regulation on business
licensing through OSS, the obligation to enter
company data when filing approval through the
Public Law Administration Director General of the
Ministry of Law and Human Rights only applies to
business entities with legal entities, especially
Limited Liability Companies, but with the
implementation of licensing services that are
integrated through OSS. The establishment of a
company that is either a legal entity or not a legal
entity such as a partnership must enter company data
specifically in the business field in accordance with
KBLI 2017 at the Public Law Administration
Director General of the Ministry of Law and Human
Rights. This is so that the data on the business sector
of the company can be accessed and integrated
through the OSS Institution when submitting a
licensing application to determine the type of permit
needed and obtain the Company Registration Number
(NIB).
With this business licensing service through
electronic or online, the business actor in registering
his business and obtaining a Company Registration
Number (NIB) does not need to deal with several
licensing agencies that have been valid, but enough to
put data through an application provided by the OSS
Institution, following the commitment to fulfill
business licenses according to their business fields.
In some countries, licensing involves various
parties and agencies, such as in the state of Israel.
According to the 1968 Business Licensing Law and
bylaws enacted, any legal entity defined as
‘‘Business’’ can’t operate without a license issued by
an official authority.Granting a business license
involves several national government agencies: the
police department, the Ministry of Health, fire and
rescue services, the Ministry of the Environment, the
Ministry of Labor and other organizations. Each
business must receive approval from relevant
government agencies in order to obtain a business
license.(Friedberg et al., 2004)
With this integrated licensing service, licensing is
simpler, more effective and efficient, so that it makes
it easy for businesses to immediately carry out their
business activities. Thus business activities will be
more developed and by itself improve the economy
and the welfare of the community.
The Effect of Licensing through Online Single Submission (OSS) on the Establishment of the Company
9
3.2 Determine the Business Field of
Business Activities Carried Out in
the Process of Establishing a
Business
The business actor when establishing a company must
determine in advance the business activities that will
be carried out, then from the business activities look
for the list of KBLI 2017 regarding any business
fields that are in line with the business activities to be
carried out in the deed of establishment and put in
place at the time registration or endorsement of the
Public Law Administration Director General.
The line of business carried out must be in
accordance with KBLI 2017. In the establishment and
/ or amendment to the articles of association the
company must include the company's goals and
objectives, covering business fields and activities by
adjusting to Regulation of the Head of the Central
Bureau of Statistics number 95 of 2015 Jo. number 19
of 2017 concerning the Indonesian Standard
Industrial Classification (KBLI 2017). At least, it
states the business fields listed in the two-digit
numbers on the ISIC, and business activities listed in
the five-digit number in KBLI 2017. The mention of
business fields that are in accordance with the
activities carried out is included in the deed of
establishment and put on the system on line to the
Data from the Public Law Administration Director
General of the Ministry of Law and Human Rights
when registered or at the time of ratification depends
on the legal status of the established company
requiring approval or it is sufficient with a
registration.
The data on business sectors that has been put in
the Public Law Administration Director General of
the Ministry of Law and Human Rights that will later
be connected in an integrated manner with the OSS
Institution when registering the licensing application
to obtain the Company Registration Number (NIB).
With such procedures, there are fundamental
differences in the procedures for establishing a
company. In relation to the business sector, the
business actor must first determine what business
activities will be carried out, then look for business
data in the list of ISIC 2017 to find out what business
sectors are in line with the business activities to be
carried out.
Whereas, regarding to the establishment
procedure by establishing a deed of establishment, all
business forms must be registered or ratified
according to the form of business in the Ministry of
Law and Human Rights by including data on business
fields to be integrated with OSS Institutions when
registering business license applications to obtain
NIB. In the previous provisions, ratification through
the Ministry of Law and Human Rights was only a
business entity with a legal entity such as a Limited
Liability Company, while a business entity that is not
a legal entity was registered with the local District
Court, such as Civil Partnership, General Partnership
and Limited Partnership.
Limited liability companies as legal entities are
affirmed in Law number 40 concerning Limited
Liability Companies, in article 1 number 1, among
others, it is stated that Limited Liability Companies
are legal entities which are capital alliances. As a
legal entity, Limited Liability Company has the legal
subject position. This position has legal consequences
that Limited Liability Company becomes a supporter
of rights and obligations in legal traffic.(Budiyono,
2011)
For companies that have been established before
the OSS is applied, they must adjust their activities
according to the business fields listed in KBLI 2017
by amending their articles of association specifically
concerning their purpose and objectives and putting
business data into the Public Law Administration
Director General of the Ministry of Law and Human
Rights' system and registering to OSS Institution to
obtain a Company Registration Number (NIB). This
is as regulated in Government Regulation Number 24
of 2018 concerning Electronic Integrated Business
Licensing Services (OSS) and Minister of Law and
Human Rights Regulation Number 17 of 2018
concerning Registration of Limited Partnership,
General Partnership and Civil Partnership, as well as
Limited Liability Companies.
In the event that registration of licenses to obtain
a NIB is not carried out, it will be suspended
(freezing) or revocation of business licenses (Article
81 Government Regulation number 24 of 2018). This
is important and must be fulfilled because business
activities that do not have permits can be subject to
administrative sanctions and even criminal acts (for
example article 106 of Law Number 7 Year 2014
concerning Trade).
4 CONCLUSIONS
1. Enforcement of integrated business licensing
services through on line or OSS has an effect, that
every company establishment must enter
company data specifically in the business sector
to the Public Law Administration Director
General of the Ministry of Law and Human
Rights, through the process of ratification or
ICASESS 2019 - International Conference on Applied Science, Engineering and Social Science
10
registration, namely for legal entities with
endorsement, while business entities which is not
a legal entity is through registration.
2. Business actors in determining business fields for
business activities carried out in the business
establishment process, must adjust to the
Indonesian Standard Industrial Classification
(KBLI) as stipulated in the Regulation of the Head
of the Central Bureau of Statistics.
3. For companies that have been established before
the OSS is applied, they must adjust their
activities in accordance with the business fields
listed in KBLI 2017 by amending their articles of
association, specifically concerning their business
objectives and inputting business data into the
Public Law Administration Director General of
the Ministry of Law and Human Rights’ system
and register to the OSS Institution to obtain a
Company Registration Number (NIB). In the
event that registration of licenses to obtain a NIB
is not carried out, it will be suspended.of your
submission.
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