<![CDATA[A sole proprietorship company is an innovation in corporate law that enables micro and small enterprise actors to obtain legal entity status through sole ownership. However, this unique character gives rise to critical legal issues regarding the position and governance of corporate organs, the application of the limited liability principle, the segregation of corporate and personal assets, the protection of creditors and third parties, reporting obligations, and status transformation as the business expands. This study employs a normative legal research method with statute, conceptual, and comparative approaches. The analysis evaluates Law No. 40 of 2007 on Limited Liability Companies as amended by Law No. 6 of 2023, Government Regulation No. 7 of 2021, Government Regulation No. 8 of 2021, Regulation of the Minister of Law No. 49 of 2025, and relevant legal literature. The findings demonstrate that while sole proprietorship companies hold strategic potential in promoting the formalization and development of micro and small enterprises, they face persistent challenges regarding corporate governance, accountability, legal liability certainty, third-party protection, and legal status transitions. The study recommends regulatory harmonization, the implementation of proportional minimum governance standards, enhanced transparency and creditor protection, and a transition mechanism based on business scale development to ensure legal certainty and support the sustainability of MSEs and the national economy.]]>
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