Minority Shareholders’ Legal Protection in a Limited Liability Company System

I Gde Sukarmo,Salim Hs,Hayyanul Haq,Zainal Asikin

doi:10.17516/1997-1370-0843

Abstract

The purpose of this study is to determine the legal protection model for the majority and minority shareholders in public limited companies. This research method is normative research. To investigate the ineffectiveness of laws and regulations, in particular, Law No. 40 of 2007 on limited liability companies in providing shareholder protection, researchers have studied the laws and regulations and considered the views of experts on legal concepts related to legal protection for shareholders, particularly, minority shareholders. The results showed that the law did not provide maximum legal protection for minority shareholders, creating an imbalance between the rights of the minority and majority shareholders. For this reason, 1) reform or progressive changes in laws and regulations are needed, for instance, in PT Law No. 40 of 2007. These changes should be fundamental to philosophical aspects (values and perspectives) in providing shareholder protection; 2) the review of shareholders’ protection methods should be based on the aspects of fairness

Highlights

Legal protection for minority shareholders in a limited liability company is a legal issue that is always interesting and up to date for discussion
The results showed that the law did not provide maximum legal protection for minority shareholders, creating an imbalance between the rights of the minority and majority shareholders
The existence of the PT Law has not been maximal in providing legal protection for minority shareholders

Summary

Introduction

Legal protection for minority shareholders in a limited liability company is a legal issue that is always interesting and up to date for discussion. Legal protection of a company’s minority shareholders is essential because the shareholders and stakeholders have distributed their rights, obligations, and authorities proportionally It is only possible when the shareholders and management of the company uphold the ethics and principles of justice that underlie the behaviour standards of the individual shareholders. The principle of justice in legal protection requires the highest power to be given to the general meeting of shareholders (Permatasari, 2014), where the majority vote (majority share) determines the decision, but the minority shareholders still have their guaranteed rights. If this situation remains unnoticed by the government, it may disrupt the investment climate and kill small investors

And Discussion

Conclusion