The Authority of Startup Directors and the Legal Responsibility for Corporate Management

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Published: 2024-01-20
Keywords:
Board of Directors, Startup, Limited liability company, Authority, Legal liability, Business risk, Corporate governance

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Agung Wahyu Nugroho
Universitas Sunan Giri Surabaya, Indonesia
Didit Darmawan
Universitas Sunan Giri Surabaya, Indonesia
Samsul Arifin
Universitas Sunan Giri Surabaya, Indonesia

Abstract

This study examines the authority and responsibilities of directors in start-up companies from a corporate law perspective. The purpose of the study is to explain the basis of directors' authority at the establishment and management stages and to assess the limits of directors' legal liability for corporate risks and losses. The method used is normative juridical through the examination of laws and regulations governing companies, investment, capital markets, employment, personal data protection, and business licensing. The results of the study show that the board of directors is a management body with full authority to run the company and represent the company in legal relationships. At the establishment stage, the authority of the board of directors determines the validity of the company's legal personality. At the management stage, this authority is limited by the company's objectives and purposes and compliance with sectoral regulations in accordance with the startup's field of business. The legal responsibility of the board of directors is assessed based on good faith, prudence, and legal compliance. Business risks that are managed appropriately are protected, while losses due to negligence or regulatory violations result in personal and collective liability. These findings emphasize the importance of legally compliant governance to maintain the sustainability of startups and protect the interests of shareholders and the public.

Article Details

Issue

Vol. 4 No. 1 (2024): Journal of Social Science Studies (JOS3)

Section

Articles

How to Cite

Nugroho, A. W. ., Darmawan, D. ., & Arifin, S. . (2024). The Authority of Startup Directors and the Legal Responsibility for Corporate Management. Journal of Social Science Studies, 4(1), 313-322. https://jos3journals.id/index.php/jos3/article/view/318

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