The (New) Company Law Framework
Ever since Indonesia’s independence, business sectors and
mainly business enterprises have played an important role in
fostering Indonesia’s economic growth. There are various
regulations that govern Indonesian business organizations.
Presently, the laws of Indonesian business organizations are
primarily governed by the Law on Limited Liability Company, Law
No.1 of 1995 (Undang-Undang tentang Perseroan Terbatas or
“UUPT”) which is considered modern Indonesian company law
(referred also as the New Indonesian Company Law), the
Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata or
Burgelijke Wetboek), and the Indonesian Commercial Code (Kitab
Undang-Undang Hukum Dagang or Wetboek van Koophandel).
The last two codes were first promulgated during the Dutch colonial
rule.
The UUPT, consist of 129 articles and was enacted on
March 7, 1995 and came into effect a year later. Prior to the
enactment of UUPT the limited liability company was governed by
only twenty-one articles in the Indonesian Commercial Code. The
UUPT symbolizes the first major revision of the Indonesian
company law since the commercial code. The promulgation of the
law was a response to the rapid economic progress that needed
provisions to complement international practices and the modern
commercial sector. This paper will focus on the UUPT since it
serves as the basis of Indonesian corporate structures.
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