When we have a Small Medium Enterprise (SME), we often wonder about the necessity of having a license. Why would we need that? This thought also happened to the Top 10 participants of YCSE Academy 2.0 by @america. Since they are still in the middle of product development, many feel like they need to wait until their products are all ready. Plus, the word “license” may be a little too intimidating, understandably. 

In last week’s online mentorship session, Farida Yuliasari, a senior legal counsel from General Electric Indonesia, shared her legal view to the social entrepreneurs. She shared there are four types of business entities in Indonesia: UD, CV, Cooperation, and Perseroan Terbatas (PT) or what also called limited liability company (LLC).

From her point of view, enterprises which registered PT as their legal business entity have more “supremacy” compared to the others. These are 4 reasons why Farida recommended participants to build a PT:

• Business owners are not personally liable for the debts and liabilities

• More appealing to investors

• Able to conduct variable scope of business

• Formation process is currently easier

In addition to business registration, Farida also suggested the 3 licenses that your social enterprise should possess:

1. Operational License

2. Technical License

3. Commercial License

Those licenses ensure the quality and safety of your business, therefore when something unexpected happens, you can explain that your business has been through the legal process for the quality and safety checking. It builds the trust of your customers and partners. They will feel more secure to use your product or service. 

Licensing your business might seem complicated, but sounds essential, right? Farida hopes the legal insights that she shared will be useful to you and all the participants. 

Last but not least, as the journey has begun, do not miss the upcoming YCSE Academy 2.0 event festival by @america where all Top 10 participants launch their products or services. It’s streamed every Wednesday at 2 pm through @america’s social media channels! Hope to see you there!