Corporate Governance 2020

Law and Practice

1. Introduction

1.1 Forms of Corporate/Business Organisations

The principal form of corporate/business organisation that applies in Indonesia is a limited liability company.

However, there are other forms of business organisations such as co-operatives, representative offices and partnerships.

1.2 Sources of Corporate Governance Requirements

Since corporate organisations in Indonesia largely take the form of a limited liability company (as mentioned in 1.1 Forms of Corporate/Business Organisations), corporate governance in Indonesia is principally governed under Law No 40 of 2007 regarding Limited Liability Companies (the "Company Law"). The elucidation of Article 4 of the Company Law states that the applicability of the Company Law does not detract from the obligation of companies to comply with the principles of corporate governance. It should also be noted that the principles of corporate governance only apply to limited liability