The Directorate General of General Legal Administration (Ditjen AHU) under the Ministry of Law has introduced a mechanism to classify companies as Administratively Inactive Corporations (Korporasi Nonaktif) on Business Registration system, if they fail to keep their corporate information up to date.
Issued through Circular Letter of the Director General of General Legal Administration No. AHU-AH.01-36 of 2026, this policy aims to improve the accuracy of Indonesia’s corporate database, encourage legal compliance, and strengthen the reporting of Beneficial Ownership (BO).
Why Is the Indonesian Government Introducing This Policy?
Indonesia’s corporate administration system has become increasingly integrated with various government platforms, including the Legal Entity Administration System (SABH), the Online Single Submission (OSS) system, and the Beneficial Ownership reporting platform.
To ensure these databases remain accurate, companies are now expected to report changes to their corporate information on a regular basis through the official Ditjen AHU portal.
The initiative supports several national objectives, including:
- Improving legal compliance among corporate entities
- Maintaining accurate and up-to-date corporate records
- Strengthening corporate governance
- Increasing transparency of company ownership and Beneficial Ownership
- Supporting integrated government licensing and verification systems
For investors, accurate corporate records also contribute to smoother regulatory processes and stronger corporate credibility.
Which Companies Are Required to Update Their Corporate Data?
The new policy applies to all legal entities registered with the Ministry of Law, including:
- Limited Liability Companies (PT)
- Foreign-Owned Companies (PT PMA)
- Foundations (Yayasan)
- Associations (Perkumpulan)
These entities are required to notify the Directorate General of General Legal Administration electronically whenever administrative changes occur.
Examples of reportable changes include:
- Reappointment of company directors or commissioners
- Changes to the Board of Directors
- Changes to the Board of Commissioners
- Other corporate administrative updates required under the Articles of Association or prevailing regulations
The updates must be submitted through the official Ditjen AHU electronic system.
What Happens If a Company Does Not Update Its Data?
The Circular Letter introduces a staged compliance mechanism for companies that fail to update their corporate information.
Companies that have not submitted any administrative updates during the previous five years (counted from 12 February 2021) may be placed on a Temporary List of Inactive Corporations.
The Ministry of Law will publicly announce this temporary list through:
- The official Ditjen AHU website
- Newspapers
- Official social media channels
- Other public communication platforms
If the company still fails to update its corporate records within six months of the announcement, it will be transferred to the Permanent List of Inactive Corporations.
What Does “Inactive” Mean?
Importantly, an Inactive status does not dissolve the company or revoke its legal entity status. The company continues to exist as a legal entity.
However, the Directorate General of General Legal Administration will assign a special “Nonaktif” status to the company’s profile within the AHU system, indicating that it has failed to comply with its corporate reporting obligations.
This administrative designation may have significant practical implications for future business activities.
Practical Risks of Being Listed as an Inactive Corporation
Although the regulation does not automatically revoke a company’s business licence, the consequences of receiving Inactive status can affect day-to-day corporate operations.
1. Restrictions on AHU Corporate Services
Companies may experience delays or obstacles when requesting corporate administrative services, including:
- Changes to company directors or commissioners
- Changes to shareholders
- Amendments to the Articles of Association
- Corporate restructuring
- Other legal entity administration services
These processes may not proceed smoothly until the company’s records have been updated.
2. Challenges During Investment and Due Diligence
Investors, financial institutions, and potential business partners routinely conduct legal due diligence before completing transactions.
An Inactive designation on the AHU corporate profile may be identified as a compliance concern during:
- Investment transactions
- Mergers and acquisitions
- Corporate financing
- Bank loan applications
- Share transfers
This may affect investor confidence and delay corporate transactions until the administrative issues have been resolved.
3. Potential Issues with OSS and Other Government Systems
Indonesia’s Legal Entity Administration System (SABH) is integrated with multiple government platforms, including the Online Single Submission (OSS) system.
If corporate information recorded in AHU differs from information stored in other government systems, businesses may encounter difficulties when:
- Applying for business licences
- Updating OSS information
- Processing operational permits
- Completing government verifications
- Managing regulatory compliance across agencies
4. Beneficial Ownership (BO) Compliance Risks
The Circular Letter also reinforces the obligation to report and verify Beneficial Ownership (BO) information.
Companies are required to report their Beneficial Owner through the official AHU BO platform.
Failure to maintain accurate BO information may expose companies to sanctions under Minister of Law Regulation No. 2 of 2025, including:
- Written warnings
- Inclusion on a government blacklist
- Suspension of access to AHU electronic services
Providing inaccurate Beneficial Ownership information may also trigger progressive administrative sanctions.
How Can a Company Remove Its Inactive Status?
Companies that have already been listed as Inactive are not permanently restricted.
To restore their status, they must submit the required administrative updates through the AHU system in accordance with the applicable regulations and their Articles of Association.
Once the Directorate General verifies the updated information:
- The “Nonaktif” designation will be removed;
- The company’s corporate profile will be updated; and
- The business will be removed from the Permanent List of Inactive Corporations.
Prompt action is therefore strongly recommended to minimise disruption to future corporate activities.
Maintaining Corporate Compliance Beyond Incorporation
Many businesses focus heavily on company incorporation but overlook the importance of ongoing corporate administration.
Maintaining accurate company records is now an increasingly important component of Indonesia’s broader corporate compliance framework.
Businesses should regularly review:
- Director and commissioner appointments
- Shareholder information
- Articles of Association
- Beneficial Ownership reporting
- OSS licensing information
- Corporate legal records
Proactive compliance helps reduce regulatory risks while supporting smoother business operations and future investment opportunities.
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Keeping corporate records up to date is now an essential part of maintaining a compliant business.
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