A merger involves more than the transfer of assets, liabilities, and shareholder interests. Where the merging companies hold multiple business licences, the transaction must also be followed by licensing adjustments so that the activities previously carried out by the merging company can be properly continued by the surviving company.

The Merging Company Ceases to Exist Without Liquidation

Under Indonesian company law, a merger occurs when one or more companies merge into an existing company. The company receiving the merger continues as the surviving legal entity, while the merging company ceases to exist by operation of law once the merger becomes effective.

Article 122 of Law No. 40 of 2007 on Limited Liability Companies, as amended under the Job Creation framework, provides that the merging company terminates without first going through liquidation. At the same time, its assets and liabilities transfer by operation of law to the surviving company, and its shareholders become shareholders of the surviving company in accordance with the approved transaction structure.

For this reason, describing the merging company as a company that has been liquidated is not technically accurate. Its legal status ends as a consequence of the merger itself rather than through a separate liquidation process.

The Transfer of Assets and Liabilities Does Not Automatically Complete the Licensing Process

The statutory transfer of assets and liabilities does not mean that every licence recorded under the merging company can simply be used by the surviving company without further administrative action. Under Indonesia’s risk-based licensing framework, business licensing records are connected to the relevant business actor, business activity, location, risk level, and the requirements applicable to that activity.

Once the merger has become effective, the company must therefore ensure that the licences supporting its operations are aligned with the post-merger corporate structure. This avoids a situation in which the business activity has moved to the surviving company as a matter of corporate law, while the licensing record still refers to an entity that has already ceased to exist.

Regulation of the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board No. 5 of 2025 specifically regulates mergers and consolidations through the Online Single Submission system. Articles 233 and 234 provide the main OSS framework for adjusting business licences following a merger.

How Business Licensing Is Adjusted Through the OSS System

The process is not treated as a simple change of the name appearing on a licence. The licensing records of both entities must first be brought into order, the merger must then be validated, and the business activities that will continue after the merger must be selected in line with the merger deed.

1. Align the licensing data of both companies

Both the surviving company and the merging company must first adjust the licensing data they already hold in the OSS System. If there are still-valid licences that were originally issued outside OSS, the relevant business activity data must be entered and the legacy licence documents uploaded into the system, as contemplated by Article 234 paragraphs (1) and (2) of Regulation No. 5 of 2025.

2. Record the merger and validate the merger deed

After the licensing data has been aligned, the surviving company records the merger adjustment in OSS. The system then validates the merger deed against the system administered by the ministry responsible for legal affairs. This step connects the effective corporate transaction with the business licensing administration.

3. Select the business activities that will continue

OSS displays the licensed business activities held by both companies. The surviving company then selects the activities that will continue after the merger, based on what has been set out in the merger deed. This selection matters because a merger does not necessarily mean that every business activity of the merging company will be maintained without change.

4. Update the licences and remove the former entity’s OSS data

Based on the activities selected, OSS updates the business licences resulting from the merger. Licences for activities that will not be continued are automatically cancelled, while the OSS data of the merging company is deleted. The licensing administration is therefore brought into line with the post-merger legal entity and the activities that the surviving company will actually carry on.

What Companies Should Map Before Making the OSS Adjustments

A merger involving several business lines can create a significant licensing workstream. Before submitting the adjustments, it is useful to prepare a clear map of the business activities, licences, and supporting documents held by each entity. This mapping is not a substitute for the formal OSS requirements, but it can reduce inconsistencies when the merger is recorded in the system.

The business activities and KBLI classifications of both the surviving company and the merging company, including which activities will continue after the merger.

The status of each business licence, including licences issued through OSS and older licences that remain valid and may need to be uploaded into the system.

Consistency between the merger deed, corporate information maintained by the Ministry of Law, and the information that will be reflected in OSS.

Sector-specific licences, Business Licences to Support Business Activities (PB UMKU), approvals, certificates, or other requirements that may have their own amendment procedures outside the general OSS merger process.

Operational readiness, particularly where ongoing activities depend on licences that have not yet been updated or remain recorded under an entity that has ceased to exist.

Sector-Specific Licensing May Require Separate Follow-Up

Article 234 of Regulation No. 5 of 2025 provides the general OSS mechanism for adjusting business licences following a merger. It does not necessarily resolve every licensing issue faced by the surviving company. Depending on the sector and the type of activity, a company may also hold PB UMKU, technical approvals, certifications, operating licences, or other sector-specific authorisations that are subject to additional requirements imposed by the relevant ministry or technical agency.

A pre- and post-merger legal due diligence exercise should therefore examine more than the existence of licences. It should also identify whether the change in legal entity triggers any notification, data amendment, re-verification, or other administrative action under sector-specific rules.

Licensing Compliance Is Part of Completing the Merger

While a merger transfers assets and liabilities to the surviving company by operation of law, operational continuity still depends on licensing records that reflect the new corporate position. Continuing to rely on licences that remain recorded under a company that has ceased to exist, without completing the required adjustments, may create a mismatch between the company’s corporate status and its licensing status.

Companies should therefore treat a merger as involving two parallel implementation tracks. The first completes the corporate steps that make the merger legally effective. The second ensures that each business activity to be continued is correctly reflected in OSS and, where relevant, in any sector-specific licensing system. Managing both tracks together gives the surviving company a clearer compliance position as it moves forward with post-merger operations.