THE NATURE OF A LIMITED COMPANY ESTABLISHMENT: ARTICLE 7 SECTION (1) OF THE LAW #40 OF 2007 CONCERNING LIMITED COMPANIES

Abstract

One of the elements that determine whether growth is successful or unsuccessful is how the business world is developing. The government has a responsibility to provide direction and guidance in the context of developing the business world and establishing an environment that is favorable to business and promotes economic growth. Protection extends to third parties connected to a limited liability company, such as debtors, creditors, and investors, as well as to legal topics related to the formation or dissolution of a limited liability company. The presence of this legal protection will affect legal certainty, which will eventually speed up the rotation of the national economy's wheels. As required by Article 33 of the Republic of Indonesia's 1945 Constitution, the nation's economy was to be realized by Law of the Republic of Indonesia Number 40 of 2007 concerning Limited Liability Businesses. The Legislation of the Republic of Indonesia Number 40 was in effect for 9 (nine) years. A number of flaws or gaps in the law governing limited liability companies were discovered in 2007 and must be promptly addressed through replacement to support changes in the global economy. The Law of the Republic of Indonesia Number 40 of 2007 governing limited liability companies needs to be replaced for a number of reasons, including to recognize private limited liability companies as legitimate legal entities and to address the findings of the Ease of Doing Business (EODB) survey. The foundation for a limited liability company's formation, the capital structure, and the presence of a board of commissioners are issues related to a limited liability company as a legal entity, and up until now, legal smuggling has frequently happened. The main and secondary data used in this legal study, which uses a normative juridical approach, are analyzed using quantitative analysis. The activity of creating a legal subject in the form of a legal entity in the form of a capital partnership established based on an agreement as stated in the deed of establishment of a limited liability company made through a notarial deed, as a vehicle for people to carry out business acts, is the conclusion of research on the nature of the establishment of a limited liability company in Article 7 paragraph (1) of Law Number 40 of 2007 concerning limited liability companies.

Keywords

• limited liability company
• regulation
• law
• public service