Abstract

Generally the local government runs local government owned­enterprises to sustain both the innate local budget revenue and the social mission of the local government. There are two corporate bodies, namely the local enterprise (Perusda) and the limited company (PT). Given the two different corporate bodies can imply different legal consequences. The local government is aware of the legal consequences when establishing such two local government enterprises (BUMD). The local government is also aware of its inconsistency to establish those two local government enterprises. One factor enabling the inconsistency is the absence of a law ruling specifically the local government enterprises. Therefore, the passage of the law on the local government enterprises may end the local government inconsistency when establishing the local government enterprises.

Full Text
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