JRSSEM 2022, Vol. 01, No. 8, 1048 – 1060

E-ISSN: 2807 - 6311, P-ISSN: 2807 - 6494

DOI : 10.36418/jrssem.v1i8.123 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

LEGAL ACCOUNTABILITY OF A SOLE DIRECTOR

IN MICRO AND SMALL LIMITED LIABILITY COMPANY

Indra Bambang1

I Nyoman Sujana2

Putu Ayu Sriasih Wesna3*

1,2,3Master of Notary, Warmadewa University, Denpasar, Bali, Indonesia

e-mail: sbindrabambang@gmail.com1, sujana2015@gmail.com2, ayuwesna@gmail.com3

*Correspondence: ayuwesna@gmail.com

Submitted: 27 February 2022, Revised: 04 March 2022, Accepted: 15 March 2022

Abstract. There is a need to investigate the regulation of legal accountability of a Sole Director

who is also the founder of the company in a micro and small Limited Liability company based on

Article 153 letter J of the Job Creation Law, because of the possibility of an ill-intentioned Director

trying to protect his/her personal assets and assuming liability only for the shares he owns. Based

on the aforementioned background, the problems in this study can be formulated as follow: 1.

How is the accountability of a Sole Directors in a micro or small Limited Liability company

regulated? and 2. What is the form of legal accountability for the sole Director in a micro and small

Limited Liability company? The type of legal research used in this study is normative juridical

research. The form of legal liability of a Sole Director in a micro or small Limited Liability company

is closely linked to the principle of limited liability of the Board of Directors. If the requirement of

having 2 (two) persons is not met, it will result in the limited accountability of the Limited Liability

company becoming unlimited accountability. Unlimited accountability means that all legal actions

and losses of the Limited Liability company become the personal liability of the founder or

shareholder.

Keywords: accountability; micro and small limited liability company; sole director.

Indra Bambang, I Nyoman Sujana, Putu Ayu Sriasih Wesna | 1049

DOI : 10.36418/jrssem.v1i8.123 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

INTRODUCTION

Indonesia as one of the largest

archipelagic countries in the world has

various potentials. According to data from

the Ministry of Cooperatives and Small and

Medium Enterprises, the number of Micro,

Small, and Medium Enterprises (MSMEs) in

2019 was around 65 million (Hartawan,

2011). With the hope to increase the

Indonesian economy, on November 2,

2020, President Jokowi officially signed

Law No. 11 of 2020 concerning Job

Creation (hereinafter referred to as the “Job

Creation Law”). There are 49 derivative

regulations, consisting of 45 Government

Regulations and 4 Presidential Regulations.

With these derivative regulations, it is

expected that the entry of foreign capital

into the country is accelerated, in order to

help Indonesian economy. It should be

noted that the Job Creation Law is

classified into 12 clusters and as many as

79 laws are synchronized in one law. One

of them is in relation to license, in an effort

to simplify the licensing process.

In addition, the increasing amount of

unemployment in Indonesia has also made

the government accelerate the formulation

of the Omnibus Law or the Job Creation

Law in mid-2020 so that the investment

door can be opened. According to Bryan A

Garner's Black Law Dictionary Ninth

Edition: “omnibus: relating to or dealing

with numerous objects or items at once;

including many things or having various

purposes”, meaning relating to or dealing

with various objects or items at once;

including many things or having multiple

purposes. It can be said that the concept of

omnibus law is a catch-all and

comprehensive rule, bound to only one

regulatory regime (Kristiyanto, 2020).

The Draft of Job Creation Law was

initially rolled out for the purpose of

simplifying the existing rules in Indonesia,

especially those that inhibit the influx of

investment into the country. Investment is

the placement of money or funds with the

hope of obtaining gain or profit on the

money or funds (Busroh, 2017). Investment

is also defined as a commitment to an

amount of funds or other resources made

at the present time, with the aim of

obtaining profits in the future.

The cluster concerning simplification in

conducting a business has attracted a lot

of attention due to the inclusion of new

provisions regarding the establishment of

Limited Liability companies (Dammann &

Schündeln, 2012); (Wang, Sun, & OuYang,

2018). In relation to the status of a

company, several provisions in Law

Number 40 of 2007 concerning Limited

Liability companies (hereinafter referred to

as the “Limited Liability Company Law”)

were also amended in the Job Creation

Law. For example, Article 7 paragraph (7) of

the Limited Liability Company Law is

amended such that the requirement that a

company must be established by 2 (two) or

more persons is exempted for companies

that meet the criteria for Micro and Small

Enterprises (hereinafter referred to as

MSE). Based on Article 153 letter A of the

Job Creation Law, a company that meets

the MSE criteria can be established by 1

(one) person and its establishment is

sufficient based on a statement of

establishment made in the Indonesian

language. This is different from the

previous law, where a Company is

1050 | Legal Accountability of a Sole Director in Micro and Small Limited Liability Company

established with a notarial deed in the

Indonesian language with a minimum of 2

(two) founders.

Job Creation Law Article 153 letter J

regarding Limited Liability companies

contains provisions relating to liabilities in

micro and small business companies. The

Article 153 letter J paragraph (1) reads:

"Shareholders of the Micro and Small

Limited Liability Companies are not

personally accountable for the agreements

made on behalf of the Company and are not

liable for the Company's losses in excess of

the shares owned.”

Paragraph (2) states that there is a

provision that may exempt the applicability

of paragraph (1) under several conditions.

This article results in a blurring of norms,

considering that, in a Limited Liability

company, there is only 1 (one) shareholder,

who can also appoint himself as the Sole

Director of the company.

In carrying out certain actions, the Sole

Director has the opportunity to prioritize

his personal interests (Maner & Mead,

2010), which may not be in line or may

conflict with the interests of the company.

While there is an obligation to make

financial reports, there are shortcomings in

terms of internal supervision of the

company, as the Board of Commissioners

(which is supposed to supervise the

Director) is responsible to shareholders

(who may also be Director of the

company). Therefore, there is a possibility

for a person with bad intentions to try and

protect his personal assets and to assume

liability only for the shares he owns in a

micro and small Limited Liability company.

There is a need to conduct a study on

the legal arrangements for the

accountability of a director who is also the

founder of the company in a micro and

small Limited Liability company based on

Article 153 letter J of the Job Creation Law,

due to the possibility of an ill-intentioned

Director trying to protect his personal

assets and assuming liability only for the

shares he owns. This blurring of norms can

lead to abuse of the company by the

Director, considering that the Director is

also the founder of the company.

Based on the aforementioned

background, the problems in this study can

be formulated as follows: 1. How is the

accountability of a sole Directors in a micro

or small Limited Liability company

regulated? and 2. What is the form of legal

accountability for the sole Director in a

micro and small Limited Liability company?

The purpose of this study is to examine

and analyse the legal accountability of a

Sole Director in a micro or small Limited

Liability company based on the Job

Creation Law.

METHODS

This research is conducted using two

types of approaches: a statutory approach

and an analytical approach. A normative

juridical analysis generally places more

emphasis on the deductive method as the

main basis and the inductive method as

the supporting work procedure. The

analysis of legal materials in this study

includes descriptive analysis, which is

descriptive, comparative, evaluative, and

argumentative (Diantha, 2016). The

technique used in this research is a

Indra Bambang, I Nyoman Sujana, Putu Ayu Sriasih Wesna | 1051

systematic and interpretive descriptive-

analytical technique, which describes the

shortcomings and advantages of a legal

product under analysis, as well as trying to

find the relationship between the

formulation of a legal concept or legal

proposition between articles contained in

the same legal product

RESULTS AND DISCUSSION

Regulation of Accountability of a Sole

Director in a Micro and Small Limited

Liability Company

Regulation of accountability of a Sole

Director as an organ of the company is not

only contained in the Limited Liability

Company Law, but is also set in the Job

Creation Law. According to the Job

Creation Law, the Board of Directors can

consist of only 1 (one) person as the Sole

Director managing the business of the

micro and small Limited Liability

company. The Sole Director of the micro

and small Limited Liability company also

performs the same role in a manner that

is very close to that of the Board of

Directors of other Limited Liability

companies in general.

The provisions in Article 153 letter D

of the Job Creation Law, paragraph (1),

reads:

"The Director of a Micro and Small

Limited Liability Company, as referred to in

Article 153A, carries out the management

of the Micro and Small Limited Liability

Company for the benefit of the Company

in accordance with the purposes and

objectives of the Company.”

In addition, Article 153 letter D of the

Job Creation Law, paragraph (2), reads:

"The Sole Director is authorized to

carry out the management as referred to in

paragraph (1) in accordance with the

policies deemed appropriate, within the

limits specified in this Law, and/or the

statement of establishment of the

Company.”

It should be considered that one of

the conditions for the establishment of a

micro and small Limited Liability company

is that it can be established by 1 (one)

(sole) founder, as stated in Article 153

letter A paragraph (1) of the Job Creation

Law, which reads:

“Companies that meet the criteria for

Micro and Small Enterprises can be

established by 1 (one) person.”

Based on the above provisions, the

founder of the company serves

simultaneously as the Sole Director and

the sole shareholder of the micro and

small Limited Liability company. This

results in the Sole Director having two

roles at once, one as the Director who

manages the company and another as a

shareholder who makes decisions

regarding the policies of the micro and

small Limited Liability company. Decisions

that have to be made by the Sole Director

covers, for example, those concerning

entering agreements with creditors,

cooperation with investors, or even the

decision to dissolve the company. In the

event of the dissolution of the micro and

small Limited Liability company, the

decision of a one-person company has

the same legal force as the General

Meeting of Shareholders (GMS).

The authority possessed by a Sole

Director in a micro and small Limited

Liability Company is also accompanied by

1052 | Legal Accountability of a Sole Director in Micro and Small Limited Liability Company

the accountabilities inherent in his person,

considering that the sole Director is also

the shareholder of the micro and small

Limited Liability company. The Job

Creation Law, especially in Article 153

letter J of the Limited Liability company

Section, paragraph (1), reads:

"The shareholders of the Micro and

Small Limited Liability Companies are not

personally accountable for arrangements

made on behalf of the Company and are

not liable for the loss of the Company

exceeding the shares owned.”

The provisions in the aforementioned

articles are almost the same as those

contained in Article 3 paragraph (1) of the

Limited Liability Company Law. For

convenience, the two articles are

presented in the following table:

Table 1. Comparison of Articles in the Limited Liability Company Law with the Job Creation

Law

Article 3 of Law no. 40 of 2007

concerning Limited Liability

Companies

Article 153 letter J Limited Liability

Company Section Law no. 11 of 2020

concerning Job Creation

1) The shareholders of the

Company are not personally

accountable for the agreements

made on behalf of the Company

and are not liable for the losses

of the Company in excess of the

shares owned.

2) The provisions as referred to in

paragraph (1) do not apply if:

a. the requirements of the

Company as a legal entity

have not been or are not

met;

b. the shareholder concerned,

either directly or indirectly,

in bad faith uses the

Company for personal gain;

c. the shareholder concerned

is involved in an unlawful act

committed by the Company;

d. the shareholder concerned,

either directly or indirectly,

unlawfully uses the

Company's assets, resulting

in the Company's assets

being insufficient to pay off

the Company's debts.

1) The shareholders of the Company for

Micro and Small Enterprises are not

personally accountable for the

arrangements made on behalf of the

Company and are not liable for the

losses of the Company in excess of the

shares owned.

2) The provisions as referred to in

paragraph (1) do not apply if:

a. the requirements of the Company

as a legal entity have not been or

are not met;

b. the shareholder concerned, either

directly or indirectly, in bad faith

uses the Company for personal

gain;

c. the shareholder concerned is

involved in an unlawful act

committed by the Company; or

d. the shareholder concerned, either

directly or indirectly, unlawfully

uses the Company's assets,

resulting in the Company's assets

being insufficient to pay off the

Company's debts..

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DOI : 10.36418/jrssem.v1i8.123 https://jrssem.publikasiindonesia.id/index.php/jrssem/index

Based on the description in the table

above, we can see that Article 3 of the

Limited Liability Company Law and Article

153 letter J of the Job Creation Law have

similarities, although on the other hand

there are differences. The difference is in

paragraph (1) of each article. Article 3

paragraph (1) of the Limited Liability

Company Law states "the shareholder of

the Company", while Article 153 letter J

paragraph (1) of the Job Creation Law

states "the shareholders of the Company for

Micro and Small Enterprises".

Article 153 letter J of the Job Creation

Law does not provide further explanation.

In contrast, Article 3 of the Limited Liability

Company Law provides further explanation,

which reads:

Elucidation of Article 3 Paragraph (1) of

the Limited Liability Company Law:

The provisions in this paragraph

emphasize the characteristics of the

Company that shareholders are only liable

for the deposit of all the shares they own,

not including their personal assets.

“Elucidation of Article 3 Paragraph (2) of

the Limited Liability Company Law:

In certain cases, it is possible to exempt

such limited liability if the provisions

mentioned in this paragraph are proven.

The liability of shareholders in the amount

of the deposit for all the shares they own

may be exempted if it is proven, among

other things, that there is a mixing of the

shareholder's personal assets and

Company assets."

The provisions in Article 3 of the

Limited Liability Company Law can be

implemented because a Limited Liability

Company based on the Limited Liability

Company Law has three corporate organs

(Sukmana, Asikin, & Djumardin, 2020), each

with their respective duties and authorities:

the Board of Directors as the manager of

the company, the Commissioner as the

supervisor and advisor of the company, and

of course there is a GMS as a forum for

deciding company policies or decisions.

The separation of function of the

company's organs should minimize the

occurrence of Ultra Vires acts carried out by

the company outside the objectives and

authority of the legal entity. In this sense,

potential abuse of authority by the Board

of Directors can be prevented because

there is a company organ that supervises it,

namely the Commissioner. An

inappropriate company policy can be

prevented so as not to make the company

suffer losses. On the other hand, the Board

of Directors of the company cannot make

decisions without the knowledge and

approval of the GMS, since the company

consists of several different shareholders

(Lu & Abeysekera, 2014); (Cai, Hillier, &

Wang, 2016); (Jiang, Cai, Wang, & Zhu,

2018); (Cao, Peng, & Ye, 2019).

However, if such concept is used in the

context of Article 153 letter J of the Job

Creation Law, even though the same term

“companies” is used, it must be noted that

in a Limited Liability company, micro and

small businesses can be established by 1

founder, in which the founder acts as the

sole shareholder and also as the Board of

Directors that manages the company.

While in a Limited Liability company there

are generally at least 2 (two) persons, a

Limited Liability Company for micro and

small businesses can be established by just

1054 | Legal Accountability of a Sole Director in Micro and Small Limited Liability Company

1 (one) (sole) person. Even though Article

153 letter J paragraph (1) of the Job

Creation Law states that the shareholders

of the Company for Micro and Small

Enterprises are not personally accountable

for the arrangements made on behalf of

the Company and are not liable for the

losses of the Company in excess of the

shares owned, it is obvious that, because

there is only 1 (one) person who acts both

as a shareholder and a Director in the

company, in this case a micro and small

business Limited Liability company, there

will be potential for abuse of the company.

There is no internal supervision and, in

making decisions, a Board of Directors of a

Micro and Small Business Limited Liability

Company only needs to conduct a GMS

with himself, considering that he is the sole

shareholder in the company.

In order to obtain a more in-depth

understanding, a grammatical

interpretation will be used, i.e., an

interpretation made based on the

terminology or words and sentence

structure in a context of language used by

lawmakers in formulating certain laws and

regulations. Thus, it can be comprehended

that the words contained in Article 153

letter J paragraph (2) of the Job Creation

Law state that the provisions in paragraph

(1) do not apply if:

a. First, whether or not the requirements

as a legal entity of the Company have

been or are met. The validity of a legal

entity is confirmed when it is approved

by the Ministry of Law and Human

Rights. Based on Article 6 paragraph (3)

of Government Regulation Number 8

2021 concerning Authorized Capital of

Companies and Registration of

Establishment, Amendment, and

Dissolution of Companies that Meet the

Criteria for Micro and Small Businesses,

it is regulated that a one-person

company obtains the status of a legal

entity after it is registered with the

Minister and obtains an electronic

certificate of registration. The

establishment of a legal Limited

Liability company for micro and small

businesses is also directly supervised by

the ministry through the Legal Entity

Administration System, which is an

electronic information technology

service for the Company organized by

the Directorate General of General

Legal Administration;

b. Second, whether the shareholder

concerned, either directly or indirectly,

in bad faith uses the Company for

personal gain. This second provision is

very subjective, considering that the

decisions of the Board of Directors are

also the decisions of the shareholders,

as these are made by the same

individual. It is very difficult to know

whether the intention of the

shareholder is good or bad because

there is no company organ that

internally oversees in the Limited

Liability company of micro and small

businesses. In management of a

company, a bad faith in using the

company for personal gain is contrary

to the principle of fiduciary duty. In this

principle, there is a value of trust that

must be maintained and upheld. In

implementing the principle of fiduciary

duty, a Board of Directors must carry

out its duties in good faith so as not to

harm other parties;

c. Third, whether the shareholder

concerned is involved in unlawful acts

committed by the Company. The

presence of only one person who is a

shareholder in the company makes the

company susceptible to committing an

Indra Bambang, I Nyoman Sujana, Putu Ayu Sriasih Wesna | 1055

act against the law. The Director, who is

also the shareholder, can take actions

that are outside his authority or take

actions that are within his authority but

not in accordance with the aims and

objectives of the company. If this

happens, the principle of piercing the

corporate veil can apply, so that the

shareholder, who is also the Director, is

accountable for his unlawful acts and is

no longer liable only to the extent of

the shares owned;

d. Fourth, whether the shareholder

concerned, either directly or indirectly,

illegally use the Company's assets,

which results in the Company's assets

being insufficient to pay off the

Company's debts. In a company, in

order to increase the company's

income, in general the company will try

to increase capital by borrowing from a

creditor. But in the business world,

profit and loss is not unusual. On the

other hand, it should be noted that, in

borrowing capital for the company, the

company's ability to pay must be taken

into account. In general, misuse of

company assets often occurs. This will

become a problem when the company

commits acts against the law and

causes losses to other parties, while the

shareholder who is also a Director takes

refuge from the limited liability of

shareholders in terms of paying debts

to creditors. Moreover, in a Limited

Liability company for micro and small

businesses, there is only one single

shareholder who also serves as the

Board of Directors in controlling the

company and entering into

agreements. "Everyone is accountable

not only for losses caused by his actions,

but also for losses caused by negligence

or carelessness." In general, in the civil

law, legal sanctions can take the form of

an obligation to meet a certain

performance (obligation) as well as the

loss of a legal state, followed by the

creation of a new legal state. Legal

accountability in the field of civil law is

a legal accountability based on civil

relationship between the legal subjects.

e. Administrative Accountability

In administrative law, legal

accountability takes the form of

administration or administrative

sanctions. Administration or

administrative sanctions are sanctions

imposed on administrative violations or

provisions of laws of an administrative

nature. In general, administration or

administrative sanctions takes the form

of fines, suspension to revocation of

certificates and/or permits, temporary

cessation of administrative services to

reduction of production allotments, as

well as other administrative actions.

Similar to the Board of Directors in a

Limited Liability company in general,

the Board of Directors in a Limited

Liability company for micro and small

business also carries accountabilities.

Accountabilities are generally stated in

the laws and regulations or other

regulations that bind them.

One of the obligations is to make

financial reports by the Board of

Directors of a Limited Liability company

for micro and small businesses, as

stipulated in Article 10 paragraph (1) of

Government Regulation Number 8 of

2021, which rules:

“One-person companies shall make

financial reports.” In this provision, the

financial reports are used as a data base

for the profile of one-person

companies and the basis for

consideration in determining the

criteria for one-person companies. If

1056 | Legal Accountability of a Sole Director in Micro and Small Limited Liability Company

the financial report has been submitted

to the ministry, then the relevant

minister shall issue proof of receipt of

the financial report electronically after

the applicant fills out the form. One-

person companies that do not submit

financial reports will be subject to

administrative sanctions in the form of:

a. written warning;

b. Sessation of rights of access to

services; or

c. Revocation of legal entity status.

Furthermore, the provisions of

Article 20 of the Minister of Law and

Human Rights Number 21 of 2021,

regarding Terms and Procedures for

Registration of Establishment,

Amendment, and Dissolution of a

Limited Liability Company Legal Entity,

briefly regulate that, in the event that

an individual company does not submit

financial reports within 6 (six) months of

the obligation to submit financial

reports. a written warning shall be sent

electronically. If the one-person

company does not fulfill the obligation

to submit financial reports within 3

(three) months after the written

warning is submitted, the minister shall

submit a second written warning

electronically. Then if the one-person

company still does not fulfill the

obligation to submit financial reports

within 30 (thirty) days after the second

written warning, the minister shall

terminate the company's access rights

to the services of the Legal Entity

Administration System. A request for

reopening an individual company's

access rights that has been terminated

may be submitted in writing to the

minister. If the one-person company

does not fulfill the obligation to submit

financial reports within 5 (five) years

after the access rights to the Legal

Entity Administration System service

are terminated, the minister shall

revoke the legal entity status of the

one-person company concerned. The

follow-up to this is that the Minister

shall issue a certificate of revocation of

the legal entity status of the one-

person company and announce it on

the official website of the Directorate

General of General Legal

Administration.

Based on this description, it is clear

that the Limited Liability company for

micro and small businesses is only

subject to administrative responsibility

(sanctions). However, in light of the

accountability of the Sole Director in a

micro and small business Limited

Liability company, there are several

things that must be considered in

relation to the principle of limited

accountability of the Board of Directors.

In the general management of the

company, there are at least three

interests that must be considered, i.e.:

a. The company's interest;

b. The interests of the company's

shareholders, especially minority

shareholders; and

c. The interests of third parties that

are legally related to the company,

in particular the interests of the

company's creditors.

As with other violations of the law,

Indra Bambang, I Nyoman Sujana, Putu Ayu Sriasih Wesna | 1057

which give the aggrieved party the right

to, and on his behalf to, file a lawsuit

against the party who causes the loss,

the violation by the Board of Directors

in managing a Limited Liability

company for micro and small

businesses also leads to the right to

charge the Board of Directors causing

the loss. Initially, under normal

circumstances, the Board of Directors

acts in the interest of the Company. In

such a context, if there is a loss to the

assets of the company that is caused by

the actions of the Board of Directors

that are wrongful, negligent, having a

conflict of interest, or against the law,

then the company is the only party

entitled to claim the loss.

One of the principles of a Limited

Liability company is “Established by

Agreement”. This principle means that

a Limited Liability company is

established by 2 (two) or more persons

with a notarial deed. If the requirement

of having two persons is not met, it will

result in the limited accountability of

the Limited Liability company

becoming unlimited accountability.

Unlimited accountability means that all

legal actions and losses of the Limited

Liability company are borne by the

founder or shareholder personally. This

condition, of course, is contrary to the

“Limited” principle that has been

applied so far.

The company is separate and

different from its owners or

shareholders, thus the liability of the

shareholders is only limited to the value

of their shares, as stated in Article 3

paragraph (1) of the Limited Liability

Company Law and Article 153 letter J

paragraph (1) of the Job Creation Law,

which states that the shareholders of

the Company are not personally

accountable for the arrangements

made on behalf of the Company and

are not liable for the Company's losses

in excess of the shares owned. The

provisions in this paragraph emphasize

that the shareholder is only responsible

for the deposit of all the shares he

owns, not including his personal assets.

This limited liability provides flexibility

in the allocation of risks and benefits

between equity holders and debt

holders, reduces the cost of collecting

transactions in cases of insolvency

(insolvency), and facilitates and

substantially stabilizes share prices

(Dawe & Timmer, 2012).

John H. Matheson argues: “Limited

liability of business owners for the

contracts, torts, and other liabilities of

their companies has been

commonplace for over one hundred

and fifty years. This concept of limited

liability means that a business owner's

potential personal loss is a fixed

amount, namely, the amount invested

in the business, usually in the form of

stock ownership. Consequently, if the

business succeeds, the owner obtains

the profits, but if he business fails, all of

the losses beyond the owner's fixed

investments are absorbed by others,

that is, voluntary or involuntary

creditors, or society at large” (Mas-Tur,

Pinazo, Tur-Porcar, & Sánchez-

Masferrer, 2015). This definition can be

freely translated, namely that the

limited liability of the owner of the

1058 | Legal Accountability of a Sole Director in Micro and Small Limited Liability Company

company in terms of contracts, unlawful

acts, or other liabilities of the company

has become commonplace within a

period of one hundred and fifty years.

The concept of limited liability is that

the potential personal loss of the

business owner is a fixed amount, i.e.,

the amount of investment invested in

the company, usually in the form of

shares. Consequently, if the business is

successful, the shareholders will

benefit, but if the business is not

successful, all losses beyond the

amount invested will be borne by

another person or party, in this case

permanent or non-permanent creditors

and society in general.

The establishment of a Limited

Liability company that can be carried

out by one party is not coherent with

the Limited Liability principle that

should be put forward in the

management of a Limited Liability

Company. A Limited Liability company

must be managed and controlled by

two or more persons. This is important

to carry out the function of "checks and

balances" in making strategic decisions

of Limited Liability companies. In

addition, considering the adopted

principle of limited liability, the

requirement for two or more parties is

important to apply so that the principle

of limited liability to the company can

be applied.

Based on the description above, the

responsibility of the Board of Directors

in a Limited Liability company for micro

and small businesses is “limited” as long

as it does not violate the provisions of

Article 153 letter J paragraph (2) of the

Job Creation Law. However, this limited

accountability will be exempted if it is

proven that the Board of Directors of a

Limited Liability Company for Micro

and Small Business complies with the

elements of Article 153 letter J

paragraph (2) of the Job Creation Law.

With the exemption of the limited

accountability, the sole Director will be

personally accountable for criminal,

civil, or administrative accountability,

whichever is in accordance with the

form of fault, unlawful act, or violation

committed.

CONCLUSIONS

Based on the discussion, conclusions

can be drawn to answer the problems

raised in this study as follows: First, the

regulation of the accountability of the Sole

Director in a Limited Liability company for

micro and small businesses is not only

contained in the Limited Liability Company

Law, but is also regulated in the Job

Creation Law. The Board of Directors in the

Job Creation Law may even consist of only

1 (one) person or as the Sole Director in

running the micro and small business

company organs (Tricker, 2011). The

provisions in Article 3 of the Limited

Liability Company Law can be implemented

because a Limited Liability company based

on the Limited Liability Company Law has

three corporate organs, each with their

respective duties and authorities. However,

if the concept is used in Article 153 letter J

of the Job Creation Law, even though the

same term “companies” is used, it must be

Indra Bambang, I Nyoman Sujana, Putu Ayu Sriasih Wesna                                                | 1059 
 
considered that a Limited Liability company 
for  micro  and  small  businesses  can  be 
established  by  1  founder,  in  which  the 
founder will become the  sole shareholder 
and  also  the  Directors  who  manages  the 
cxompany. 
Second, the form of legal accountability 
of  a  Sole  Director  in  a  Limited  Liability 
company  for  micro  and  small  business  is 
closely  related  to  the  principle  of  limited 
accountability  of  the  Board  of  Directors. 
This principle means that a Limited Liability 
company is established by 2 (two) or more 
persons  with  a  notarial  deed.  If  the 
requirement of 2 (two) persons is not met, 
it will result in the limited accountability of 
the  Limited  Liability  company  becoming 
unlimited  accountability.  Unlimited 
accountability means that all legal actions 
and losses of the Limited Liability company 
are  borne  by  the  founder  or  shareholder 
personally.  With  the  exemption  of  the 
limited  liability,  the  Sole  Director  will  be 
personally accountable for criminal, civil, or 
administrative accountability, whichever is 
in  accordance  with  the  form  of  error, 
unlawful act or violation committed. 
 
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© 2021 by the authors. Submitted  
for possible open access publication  
under  the  terms  and  conditions  of  the  Creative 
Commons  Attribution  (CC  BY  SA)  license 
(https://creativecommons.org/licenses/by-sa/4.0/). 
 