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Paramita Prananingtyas
Fakultas Hukum, Universitas Diponegoro
Religion Humanities Economics, Econometrics & Finance Education Languange, Linguistic, Communication & Media Law, Crime, Criminology & Criminal Justice Mathematics Social Sciences

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Journal : Jurnal Hukum Progresif

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ADDRESSING LEGAL GAPS IN INDONESIA’S INDIVIDUAL LIMITED LIABILITY COMPANY: CHALLENGES AND THE PATH TO REFORM Irawati, Irawati; Santoso, Budi; Prananingtyas, Paramita
Jurnal Hukum Progresif Vol 13, No 1 (2025): April 2025
Publisher : Doctoral of Law Program, Faculty of Law, Universitas Diponegoro

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.14710/jhp.13.1.190-225

Abstract

The establishment of the Individual Limited Liability Company in Indonesia presents several fundamental issues related to the validity of incorporation documents, ambiguity regarding the pre-approval period, and conceptual inconsistencies between Government Regulation No. 8 of 2021 and the Limited Liability Company Law. One of the main issues is the absence of a notarial deed, which is often the legal basis for establishing a legal entity in Indonesia, creating legal uncertainty for third parties. Additionally, the misalignment in the use of the terms “registration” and “approval” in this regulation contributes to confusion about when the legal entity status of the Individual Limited Liability Company can be obtained. Another issue is the organizational structure of the Individual Limited Liability Company, which combines the functions of shareholder and director in a single individual, eliminating the basic principles of power separation and fiduciary duty that underpin good governance. This also hinders the application of the Piercing the Corporate Veil doctrine and blurs the boundary between the owner and the company itself. The absence of a Supervisory Board in this structure further exacerbates the situation as there is no adequate oversight mechanism. Therefore, an update to Government Regulation No. 8 of 2021 is needed, which includes the obligation for a declaration of establishment before a notary, clarity on the personal responsibility of the founder before approval, and the regulation of a periodic reporting mechanism. In the long term, legislative reforms are necessary to create a new legal entity distinct from the Limited Liability Company Law, considering lessons from other jurisdictions and the values of Pancasila.
Co-Authors Abdurrohim, Muhammad Dzakki Achmad Budiman Adikta Nugroho Ahmad Syarief, Ahmad Aminah Aminah Aminudin Aziz Anda Narulita, Hardita Angkat Poenta Pratama Athaya, Ghina Beta Avissa Boni Kristobaik Simangunsong Buana, Chriselda Febriany Kartika Budi Ispriyarso Budi Santoso Budiharto Budiharto Budiharto Budiharto Cahyaning Ratri P Dahana, Thomas Nanda Dewanti Nur Indrati Diba, Nabilah Farah Disemadi, Hari Sutra Dita Veronika Dwi Budi Santoso Edy Sismarwoto Erlangga Nugraha Fifiana Wisnaeni Gabriela Pristya Cahyaningtyas Gika Asdina Firanda Giovanni Bagas Hizkia Gubanov, Konstantin H. Noho, Muhammad Dzikirullah Hafidh Prasetyo, Mujiono Hapsari, Shabrina Hari Sutra Disemadi Hari Sutra Disemadi Hari Sutra Disemadi Hari Sutra Disemadi Harsono, Ivan Hartono, Laksamana Varelino Zeustan Hendro Saptono Hendro Saptono Husin Husin Irawati Irawati Irawati Irawati Irawati Irawati Irma Cahyaningtyas, Irma Islami, Trinah Asi Ismoyo Aji, Anton Kholis Roisah Konstantin Gubanov Kunto Dewandaru, Hilarius Lita Tyesta ALW Lumbanraja, Anggita Doramia Maharani, Ferra Tiara Maimanah, Zahra Amalia Meitiarany Bakhtiar, Rahmah Muhamad Azhar, Muhamad Muhammad Adry Setyawan Muhammad Mizan Aufa Nabila, Nisa Ningsih, Ayup Suran Ninik Zakiyah Niswa, Erin Novira Maharani Sukma Novira Maharani Sukma, Novira Maharani Nur, Aisyah Amini Prasetyo, Mujiono Hafidh Pratama, Angkat Poenta Priscilla D Z Saragih Putri Amalia Putri Islami, Nabilla Putri, Nindy Putri, Preeti Kartika Putri, Trisa Mardeta Ratna Kumala Sari Rinaldy Ridwan Noor Rinitami Njatrijani Ristiyana, Gandes Robertha Nimas Ayu R Salwa, Adinda Maura Sartika Nanda Lestari, Sartika Nanda Siti Mahmudah SITI MAHMUDAH Siti Zulaekhah Sukirno Sukirno Suteki, Suteki Syaifuddin, Luthfi Tanaya Setiadi, Andika Thalib, Nur Aisyah Thariq, Muhammad Ulul Azmi Wahid Hadi Purnomo Wardhani, Harumsari Puspa Widya, Emy Winarso, Teguh Yadev, Marconery Zakiyah, Ninik Zakiyah, Ninik Zhahara, Sekarressie Pathria