Limited Liability without Corporate Organs: Creditor Protection in Indonesia’s Single-Member Company

Abstract

This study examined creditor protection in the individual company (perseroan perorangan), the single-member limited liability company introduced into Indonesian company law by the Job Creation Law. The problem addressed was that the classical justification for limited liability rests on structural preconditions, namely asset separation, capital adequacy, internal monitoring, and disclosure, whereas the individual company retains limited liability while the founder is simultaneously sole shareholder and sole director. The research applied a normative legal method combining statutory, conceptual, and comparative approaches, examining Indonesian primary legal materials alongside European Union company law on single-member companies. The findings showed that of the four preconditions only asset separation was partly retained, that internal monitoring was structurally absent because one person held every corporate role, and that statutory veil piercing under Article 153J paragraph (2) therefore operated as the sole residual safeguard. The study further found that the safeguard is remedial rather than preventive, is invoked only by the creditor, and must be proved from records held exclusively by the shareholder against whom it is asserted. It was concluded that creditor protection in this legal form depends less on the existence of veil-piercing grounds than on whether the creditor can obtain the evidence those grounds require.