Regulation of Treasury shares in Public Companies and Share Governance

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Published: 2024-01-20
Keywords:
Treasury shares, Public companies, Capital markets, Corporate governance, Shareholder protection, Share buybacks, Company law

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Ahmad Zidan Rizki Almubarak
Universitas Sunan Giri Surabaya, Indonesia
Rommy Hardyansah
Universitas Sunan Giri Surabaya, Indonesia
Novritsar Hasitongan Pakpahan
Universitas Sunan Giri Surabaya, Indonesia

Abstract

This study discusses the regulation and application of treasury shares in public companies from the perspective of corporate law and capital markets. Treasury shares are understood as shares that have been issued and then repurchased by the company for specific purposes that are legally valid. In the corporate legal system, these shares are classified as passive shares that do not have voting rights or dividend rights, so their status is different from shares owned by active shareholders. This study uses a normative juridical method with a regulatory and corporate law doctrine approach. The results of the study show that the regulation of treasury shares is designed to maintain a balance between the interests of corporations in managing capital structure and the rights of shareholders to legal protection. Capital market regulations set quantitative limits, information disclosure obligations, and shareholder approval mechanisms as control instruments. The application of treasury shares has direct implications for corporate governance through increased director accountability, policy transparency, and strengthened protection for minority shareholders. In addition, supervision by capital market authorities and the application of administrative sanctions serve as guarantees of legal compliance. With a structured legal framework, treasury shares can function as a legitimate capital management instrument without disrupting the fairness and integrity of the capital market.

Article Details

Issue

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

Section

Articles

How to Cite

Almubarak, A. Z. R. ., Hardyansah, R. ., & Pakpahan, N. H. . (2024). Regulation of Treasury shares in Public Companies and Share Governance. Journal of Social Science Studies, 4(1), 339-348. https://jos3journals.id/index.php/jos3/article/view/321

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