Introduction to MoL Regulation No. 49 of 2025: The Latest Regulatory Framework regarding the Obligation to File Annual Reports for Limited Liability Companies in Indonesia

Following the enactment of Regulation of the Minister of Law of the Republic of Indonesia Number 49 of 2025 on Requirements and Procedures for the Establishment, Amendment, and Dissolution of Limited Liability Company (‘MoL Regulation No. 49 of 2025’), new regulatory provisions have been established regarding the management of limited liability companies as legal entities. These provisions primarily concern the preparation of the company's annual report and the submission and approval process for such reports.

The regulations concerning the company’s annual report are essentially established under the provisions of Law No. 40 of 2007 on Limited Liability Companies, as amended by Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation (‘Limited Liability Companies Law’), specifically in Articles 66 to 69. The ‘Whereas’ section of MoL Regulation No. 49 of 2025 also states that the Limited Liability Companies Act is one of the regulatory frameworks underpinning this Ministerial Regulation. In other words, the annual report provisions in MoL Regulation No. 49 of 2025 are essentially aligned with the Limited Liability Companies Act's regulatory direction on similar matters.

Upon closer examination, it becomes clear that one of the primary reasons for the issuance of MoL Regulation No. 49 of 2025 is closely linked to the existence of Government Regulation in Lieu of Law No. 2 of 2022. This regulation substantially altered the regulatory framework for limited liability companies under Law No. 40 of 2007. The provisions of Government Regulation in Lieu of Law No. 2 of 2022 have diversified the concept of limited liability companies into two categories: capital partnership legal entities and individual legal entities. In this regard, MoL Regulation No. 49 of 2025 strictly delineates the regulatory framework for these two forms of limited liability company as a technical implementing regulation under the Limited Liability Companies Act.

Broadly speaking, the provisions regarding the preparation of a company’s annual report contained in the Limited Liability Companies Act will remain fully in effect, despite the new regulatory provisions in MoL Regulation No. 49 of 2025. However, in line with the aforementioned separation of limited liability companies into capital partnerships and individual legal entities, Article 16 jo. Article 2 (1) of MoL Regulation No. 49 of 2025 stipulates that the obligation to submit annual reports applies only to limited liability companies in the form of capital partnerships.

In this regard, both the Limited Liability Companies Act (Article 66(1)) and MoL Regulation No. 49 of 2025 (Article 16(1)) stipulate that the Company’s Board of Directors must submit the annual report to the General Meeting of Shareholders (‘GMS’) no later than six (6) months after the end of the Company’s fiscal year. However, before submission to the GMS, the annual report must first be reviewed by the Board of Commissioners. Both the Limited Liability Companies Act (Article 69(1)) and MoL Regulation No. 49 of 2025 (Article 16(2)) stipulate that the GMS must approve the Company’s annual report. However, MoL Regulation No. 49 of 2025 contains further provisions on this matter, stating in Article 16(2) that such approval must be recorded in a notarial deed and submitted to the Minister of Law no later than thirty (30) calendar days from the signing of the notarial deed.

The Company’s annual report is submitted electronically to the Minister of Law by uploading the required documents to the SABH system (Sistem Administrasi Badan Hukum / Legal Entity Administration System), which is managed by the Directorate General of General Legal Administration. There are 2 (two) required documents that must be uploaded, namely:

a. The notarial deed mentioned previously; and
b. The company's annual report itself, which must consist of the following details stipulated in Article 16(6) of MoL Regulation No. 49 of 2025:

i. financial statements consisting of:

(a) the balance sheet for the most recent fiscal year compared to the previous fiscal year;
(b) the income statement for the fiscal year in question;
(c) the cash flow statement and the statement of changes in equity; and
(d) notes to the financial statements.

ii. a report on the Company's activities;
iii. a report on the implementation of social and environmental responsibilities;
iv. details of issues that arose during the fiscal year and affected the Company's business activities;
v. a report on the supervisory duties carried out by the Board of Commissioners during the most recent financial year;
vi. the names of the members of the Board of Directors and the Board of Commissioners;
vii. salaries and allowances for members of the Board of Directors, and salaries, honoraria and allowances for members of the Board of Commissioners of the Company for the most recent fiscal year.

Note:
Essentially, the details of the minimum substantive content that must be included in the Company’s annual report, as outlined above, are also regulated in Article 66 (2) of the Limited Liability Companies Act.

Once all of these requirements have been completed, the Director General of the General Legal Administration at the Ministry of Law will issue a letter of acknowledgment of receipt (as set out in Article 16(7) of MoL Regulation No. 49 of 2025).

Furthermore, the guidelines on standardising the content of the annual report are still based on the provisions of the Limited Liability Companies Act, namely:

a. The financial statements included in the Company’s annual report must be prepared in accordance with financial accounting standards established by the Indonesian Institute of Certified Public Accountants (Organisasi Profesi Akuntan Indonesia) and recognised by the Government of the Republic of Indonesia (as stipulated in Article 66(3) of the Limited Liability Companies Act)
b. The financial statements included in the Company’s annual report must be audited by a public accountant if:

i. the Company’s business activities involve collecting and/or managing public funds;
ii. the Company issues debt instruments to the public;
iii. the Company is a Public Company;
iv. the Company is a state-owned enterprise in which all shares are owned by the state;
v. the Company has assets and/or total business turnover valued at least Rp50,000,000,000.00 (fifty billion rupiah); or
vi. it is required by law.

Note:
• If the Company does not meet the above requirements, its financial statements cannot be approved by the General Meeting of Shareholders (as stipulated in Article 68(2) of the Limited Liability Companies Act).
• Specifically for Companies falling under classifications i, ii, and iii, the balance sheet and income statement within the financial statements approved by the GMS must be published in 1 (one) newspaper, no later than 7 (seven) days after such financial statements are approved by the GMS (as provided for in Articles 68(4) and (5) of the Limited Liability Companies Act).

On the other hand, other regulatory aspects of the Company’s annual report remain governed by the Limited Liability Companies Act, specifically concerning the obligation for all members of the Board of Directors and the Board of Commissioners serving during the relevant fiscal year to sign the Company’s annual report (as set out in Article 67(1)). This signing process holds members of the Board of Directors and the Board of Commissioners accountable for their performance within the Company (as set out in the Explanatory Notes to Article 67(1) of the Limited Liability Companies Act).

The annual report must also be made available at the Company’s office starting from the date on which the notice of the GMS is issued, so that shareholders may review it. If any member of the Board of Directors or the Board of Commissioners fails to sign the report, such person must provide a written explanation regarding their action (as provided for in Article 67(2) of the Limited Liability Companies Act). This written explanation may be included in a separate letter attached to the annual report. If a member of the Board of Directors or the Board of Commissioners fails to provide a written explanation, they are deemed to have approved the contents of the Company’s annual report. Conceptually, the GMS will use the existence of such written explanation as a basis for evaluating the report (as provided in the Explanatory Notes to Article 67(2) of the Limited Liability Companies Act).

As mentioned in the preceding paragraphs, the submission of the Company’s annual report for approval to the Minister of Law is an obligation that the joint-stock company must fulfil. As stipulated in Article 17(1) of MoL Regulation No. 49 of 2025, if the Company fails to fulfil this obligation within 30 (thirty) days of signing the notarial deed confirming the General Meeting of Shareholders’ approval of the Company’s annual report, the Company will be subject to administrative sanctions by the Minister of Law, which will be implemented by the Director General of General Legal Administration.

Specifically, the sanctions to be imposed are as follows (as stipulated in Articles 17(2), 18–20 of MoL Regulation No. 49 of 2025):

a. Written Warning
This type of sanction is imposed by issuing a notification to the SABH and/or via e-mail when the Company exceeds the deadline for submitting the GMS’s approval of the annual report, as stated in the preceding paragraph.

b. Access Blocking
This sanction will be imposed if the Company has still not fulfilled its obligation to submit approval of the Company's annual report within thirty (30) calendar days of the written warning sanction mentioned in point a above. The access block consists of suspending the company's access to the SABH system.

A Company subject to an access block sanction may request the removal of the block to the Director General of General Legal Administration via the SABH system. This request must fulfil the following two (2) cumulative requirements:

i. Filling out the access unblocking form; and
ii. Uploading all the documents required to submit the General Meeting of Shareholders’ approval of the Company’s annual report to the Minister of Law, as previously outlined in the opening section of this newsletter, consisting of:

a) The notarial deed as mentioned previously; and
b) The Company’s annual report itself.

Access will be unblocked once the Director General of the General Legal Administration has confirmed that the Company has fully carried out and fulfilled the two aforementioned actions.

Joint-stock companies must ensure that they comply with the requirement to submit the approval of the GMS for the Company’s annual report, because the blocking of the Company’s access to the SABH system may have the following implications:
a. The Company being unable to make changes to its data and articles of association;
b. Access to legal administration services is being closed; and
c. Legal proceedings and Company management are being temporarily suspended.

Note: The content of this article does not constitute legal advice and should not be relied upon since there will be implemented regulations to be further issued. The judge's opinion may also be different, due to the facts relevant to the case. If you need specific advice related to this topic, please contact us by email at info@yangandco.com.