Unveiling the Legal Veil of Conglomerate-Owned Companies

Abstract

Objective: This research seeks to comprehensively analyze the legal dimensions associated with conglomerates' management and oversight of their subsidiary companies. The study emphasizes the significance of adhering to established legal principles and frameworks in this context.
 
 Theoretical Framework: The term "conglomerate," as defined by the Big Indonesian Dictionary (KBBI), pertains to a prominent entrepreneur who possesses multiple companies or subsidiaries operating across diverse business sectors. These entities, while legally distinct, are consolidated into an integrated economic entity under the conglomerate's control. Conglomerates leverage their assets and existing companies to invest in other businesses through means such as establishing new entities, acquisitions, mergers, or spin-offs. This consolidation aims to achieve dividends, gain product/service control, and expand market share.
 
 Method: This study employs a normative legal research methodology to investigate conglomerates' legal aspects. The research approach involves scrutinizing legal rules, principles, and doctrines. It adopts a statutory approach by analyzing relevant legislation and regulations pertaining to conglomerates. Additionally, a conceptual approach is utilized to explore evolving perspectives within legal sciences. The research draws on primary, secondary, and tertiary legal sources, including legislation, official records, literature, expert opinions, and legal publications.
 
 Results and Conclusion: Conglomerates oversee distinct companies that form an integrated group, maintaining independent legal status. Professional management is upheld through separate Boards of Directors and Commissioners. Legal clarity and adherence to corporate law are emphasized to prevent liability. Amendments or new laws are needed in Indonesian Corporate Law to address conglomerate liability gaps.
 
 Originality/Value: This research contributes to the field by offering a comprehensive exploration of the legal intricacies associated with conglomerates and their subsidiary entities. It highlights the importance of adhering to legal frameworks and principles, providing insights into potential legal reforms necessary for effective conglomerate management and control.