Minimum Authorized Capital After the Enactment of Job Creation Law: Status Quo, Controversies, and Road Ahead

  • Kania Jennifer Wiryadi University of Indonesia, Indonesia
  • Bayu Novendra University of Indonesia, Indonesia

Abstract

In a limited liability company, capital becomes one of the primary elements. However, the regulation regarding capital in Indonesia has changed several times, as its latest concern on the enactment of the omnibus bill on Job Creation Law in 2020. This paper discussed the following problems. First, what are the status quo and the development of regulations regarding minimum capital requirements in Indonesia? Second, what are the pros and cons of minimum capital requirement regulations and their developments in other countries? Third, what is the minimum capital requirements regulation that suits the conditions in Indonesia? This paper used legal research, emphasizing literature study. In so doing, the data were analyzed with the deductive method to construct conclusions. This paper showed that each limited liability company from the 1995 Limited Company Law, the 2007 Limited Company Law to the Job Creation Law had various minimum capital requirements provisions that lasted to its abolishment under the Job Creation Law. In this context, the initial policy on the minimum capital requirement was to protect creditors. In practice, however, this policy was not effective because of many other effective alternatives to protect creditors, by encouraging transparency in corporate transactions and offering easy access to corporate information. The dominance of micro and small business units in Indonesia (99% of business units) explained the urgency of eliminating minimum capital requirements regulations. The elimination of minimum authorized capital requirements was a tremendous effort to strengthen micro and small enterprises.


KEYWORDS: Limited Liability Company, Job Creation Law, Company Law.

References

Anggono, Bayu Dwi & Fahmi Ramadhan Firdaus, “Omnibus Law in Indonesia: A Comparison to the United States and Ireland” (2020) 7:3 Lentera Hukum.

Armour, John, “Legal Capital: An Outdated Concept?” (2003) European Business Organization Law Review.

Aziz, Muhammad Faiz & Nunuk Febriananingsih, "Mewujudkan Perseroan Terbatas (PT) Perseorangan Bagi Usaha Mikro Kecil (UMK) Melalui Rancangan Undang-Undang Tentang Cipta Kerja" (2020) 9:1 Rechstvinding.

Chan, Gordon Y M, “Why does China not abolish the minimum capital requirement for limited liability companies?” (2009) SSRN Electronic Journal.

Diatmika, I Dewa Gede Agung Putra & Ni Putu Purwanti, “Pengaturan Modal Dasar Perseroan dengan Berlakunya Peraturan Pemerintah Nomor 29 Tahun 2016 tentang Perubahan Modal Dasar Perseroan Terbatas” (2020) 8:2 Jurnal Kertha Semaya 176–191.

Doing Business, “Why are minimum capital requirements a concern for entrepreneurs?”, online: Doing Business .

Easterbrook, Frank H & Daniel R Fischel, The Economic Structure of Corporate Law (Cambridge: Harvard University Press, 1996).

ForeignerFI, "Minimum Capital Requirement for Limited Liability Companies Will be Abolished". online: ForeignerFi .

Ginting, Jamin Hukum perseroan terbatas: (UU No. 40 Tahun 2007) (Bandung: Citra Aditya Bakti, 2007).
Harahap, Yahya, Hukum Perseroan Terbatas (Jakarta: Sinar Grafika, 2019).

Harris, Ron, “a New Understanding of The History of Limited Liability: an Invitation For Theoretical Reframing” (2020) Cambridge University Press.

Haryanti, Dewi Meisari & Isniati Hidayah, “Potret UMKM Indonesia: Si Kecil yang Berperan Besar (Kementerian Koperasi dan UKM)”, online: .

Indonesian Ministry of Law and Human Rights, Naskah Akademik Rancangan Undang-Undang Cipta Kerja (2020).

Indonesian Ministry of Law and Human Rights, Naskah Akademik Rancangan Undang-Undang Perseroan Terbatas (Kementerian Hukum dan HAM, 2016).

Indonesian Ministry of Law and Human Rights, Laporan Akhir Kelompok Kerja Analisis dan Evaluasi Hukum terkait Badan Usaha, (Jakarta: Kementerian Hukum dan HAM, 2018).

J A, McCahery, Raaijmakers T & Vermeleun E PM, The Governance of Close Corporations and Partnerships (Oxford: Oxford University Press, 2004).

J, Barnevald, “Legal Capital and Creditor Protection: Some Comparative Remarks” in The European Private Company (SPE): a Critical Analysis of the EU Draft Statute (2009) 81.

Judith, Freedman, “Limited Liability: Large Company Theory and Small Firms” (2000) 63:3 The Modern Law Review 317–354.

Khairandy, Ridwan. Perseroan Terbatas Doktrin, Peraturan Peraturan Perundang-Undangan dan Yurisprudensi (Yogyakarta: Total Media, 2009).

Khairandy, Ridwan. Pokok-Pokok Hukum Dagang Indonesia (Yogyakarta: FH UII Press, 2014).

Machado, Fransisco Soares, Effective Creditor Protection in Private Companies: Mandatory Minimum Capital Rules or Ex Post Mechanisms? London School of Economics and Political Science, 2009.

Milne, Allstair, “Minimum Capital Requirement and the Design of the New Basel Accord: a Constructive Critique” (2001) 9:4 Journal of Financial Regulation and Compliance.

Nelson, Madelene, “The Share Capital Requirement: A Comparative Study of its Functions, Problems, and Future” (2013) Lund University.

Nugraha, Xavier, Krisna Murti & Saraswati Putri, “Third Parties’ Legal Protection Over Agreed Authorized Capital Amount by Founders in Limited Liability Companies” (2019) 6:2 Lentera Hukum.

Purnamasari, Eka, “Alasan Pembatasan Dan Perubahan Ketentuan Terkait Modal Dalam Perseroan Terbatas” (2018) 5:1 Jurnal Magister Kenotariatan Fakultas Hukum UNISSULA 208.

Pangestu, M. Teguh & Nurul Aulia, "Hukum Perseroan Terbatas Dan Perkembangannya di Indonesia" (2017) 1:3 Business Law Review.

Prasetya, Rudhi, Kedudukan Mandiri Perseroan Terbatas (Bandung: Citra Aditya Bakti, 1996).

Putra, I Putu Wisnu Dharma & I Nyoman Budiana, "Kebebasan Penetapan Modal Dasar Perseroan Terbatas Oleh Para Pihak Berdasarkan Peraturan Pemerintah Nomor 29 Tahun 2016" (2018) 1:1 Jurnal Analisis Hukum.

Putra, Nanda Narendra, “PP 29/2016 ‘Simpangi’ Besaran Modal Dasar Pendirian Perseroan Terbatas”, online: hukumonline.com .

Raharjo, Handri, Hukum Perusahaan Step by Step Prosedur Pendirian Perusahaan (Jakarta: Pustaka Yustisia, 2013).
Santiago, Faisal, Pengantar Hukum Bisnis (Jakarta: Mitra Wacana Media, 2012).

Sardjono, Agus et al, Pengantar Hukum Dagang (Jakarta: Raja Grafindo Persada, 2014).

Usman, Rachmadi, Dimensi Hukum Perusahaan Perseroan Terbatas (Bandung: Alumni, 2004).
Published
2021-04-24
How to Cite
WIRYADI, Kania Jennifer; NOVENDRA, Bayu. Minimum Authorized Capital After the Enactment of Job Creation Law: Status Quo, Controversies, and Road Ahead. Lentera Hukum, [S.l.], v. 8, n. 1, p. 1-22, apr. 2021. ISSN 2621-3710. Available at: <https://jurnal.unej.ac.id/index.php/eJLH/article/view/21946>. Date accessed: 05 aug. 2021. doi: https://doi.org/10.19184/ejlh.v8i1.21946.
Section
Articles

Most read articles by the same author(s)

Obs.: This plugin requires at least one statistics/report plugin to be enabled. If your statistics plugins provide more than one metric then please also select a main metric on the admin's site settings page and/or on the journal manager's settings pages.