Legal Implications of the Job Creation Law on the Concept and Liability of Individual Companies in Indonesia
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Abstract
In the background of globalization and economic competition dynamics, efforts to strengthen the legality of Micro and Small Enterprises (MSEs) are realized through the reformulation of business entity policies, particularly with the introduction of the concept of Sole Proprietorship. This study uses a normative legal method to analyses fundamental changes in the national corporate legal system following the enactment of Law No. 11 of 2020 on Job Creation. The results of the study show that this reform opens up more inclusive legal access for MSME actors, provides a formal mechanism for establishing sole proprietorships, and introduces significant simplification of administrative procedures. However, there are challenges in terms of legal certainty due to the disharmony between the principle of capital association in the Limited Liability Company Law and the concept of sole proprietorships. Legal implications also arise regarding the limitations of limited liability and the potential for abuse of single legal entities. Therefore, it is necessary to strengthen internal control mechanisms and harmonies regulations to ensure that legal protection and accountability remain guaranteed for all parties involved. These findings are expected to serve as a reference in the development of adaptive and competitive corporate regulations in Indonesia.
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