Small enterprises and company law in Indonesia; A study of the limited company in Indonesian commercial practice

Abstract

[...]it is necessary to furnish starting capital for the company.12 This capital may come from several sources, but according to the law at least 10% must 10 Burns' findings could also be interpreted as indicating that precisely because the articles of incorporation are not published, the directors can be held severally liable at law for the company's debts, which in turn explains why private and company funds mix freely and why the need for bankruptcy proceedings does not arise. [...]legislation is aimed at spreading the benefits of government contracts over as large a group of Indonesian entrepreneurs as possible.15 Contracts are therefore not necessarily awarded on the basis of high quality at the lowest cost. [...]the state is a reliable debtor and does not welsh on its debts.17 So far I have examined the reasons people may have for establishing companies or for not doing so by reference to the law and the literature. [...]the case of Zafrullah shows that, even after a contract has been awarded, the law offers insufficient guarantee that the contractor will be able to hold out against overwhelming pressure to transfer the contract to someone else.