Choosing the Right Business Vehicle (Part II): Non-Profit Oriented Entities

Last week’s Indonesian Law Digest (“ILD”) titled “Choosing the Right Business Vehicle (Part I): Profit-Oriented Entities”,[1] focused on incorporated entities(badan hukum) for commercial purposes namely limited liability companies (LLC) and cooperatives. The characteristics of both entities  are relatively similar, yet different in nature.

Generally speaking, an LLC only has one aim: to generate income for the organization. In contrast, cooperatives concentrate its activities on the participation of its members for the purpose ofthe members’ welfare.

After discussing profit-oriented entities, this edition of ILD will shift its focus  non-profit orientedincorporated entities namely foundations(yayasan), churches(gereja), and associations(perkumpulan). This ILD will highlight the main characteristics of each organization, establishment process, organizational structures, and how each organization may generate income to maintain its existence.