Small Business, Big Questions: The Legal Landscape of Single-Member Limited Liability Companies Post-Job Creation Law

Abstract

The establishment of Single-Member Limited Liability Companies through Indonesia’s Job Creation Law signifies a major transformation in the country's business framework, aimed at fostering entrepreneurial development, particularly for micro and small enterprises. However, it also raises legal and governance concerns, including potential conflicts of interest, misuse of assets, and insufficient regulatory oversight. This study adopts a normative juridical approach with case and comparative approaches to explore the legal responsibilities of single-member company founders. The findings reveal that while the model enhances business accessibility, the concentration of ownership and management in one individual often leads to moral hazards, such as blending personal and corporate assets, inadequate financial disclosures, and exploitation of limited liability protections. To address these challenges, the research emphasizes the importance of stronger governance measures, including mandatory financial audits, enhanced reporting obligations, and stricter enforcement of good corporate governance principles. Comparative insights from other countries, such as those in the European Union and Southeast Asia, illustrate effective practices for improving legal accountability and mitigating risks, ultimately contributing to sustainable economic growth.