The Legal Rationale Behind the Determination of Minimum Capital Requirements for Limited Liability Companies by Founders in Indonesia
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Changes in the regulation of minimum share capital requirements for limited liability companies have had consequences for corporate law in Indonesia. Implicitly, the absence of a minimum threshold of capital as an important wealth owned by the company is not a necessary or urgent requirement for the creation or operation of a limited liability company. The government's motive for changing these provisions is consistent with the mandate of the Academic Manuscript of the Draft Law No. 11 of 2020 on Job Creation, which aims to facilitate and promote the growth of micro and small enterprises in the economy. This study will normatively analyze and interpret provisions on minimum capital requirements. It uses a legislative approach and a historical approach to study the legal rationality ( ratio legis ) of establishing capital requirements in previous regulatory acts. The results generally suggest that the ratio legis for regulation of minimum capital in Indonesia depends on economic conditions and the principle of ease of doing business. However, there is an ambiguity in the regulation of minimum capital requirements in the Law of the Republic of Indonesia No. 6 of 2023 on the Establishment of Government Regulation in place of Law No. 2 of 2022 on Job Creation as a Law (hereinafter referred to as the Job Creation Law), which replaces Law No. 11 from 2020 on job creation. In particular, the phrase "founder's decision" used to determine the amount of capital is different from the phrase in the regulatory document in the Academic Manuscript of the Job Creation Act, which is Government Regulation No. 29 of 2016 amending the capital requirements of limited liability companies, where the phrase "founders' agreement" is used. The Jobs Act does not recognize the existence of an equity partnership, so the phrase needs to be revised because an equity partnership is a company based on an agreement.
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