The responsibility of a limited liability company with authorized fictitious capital: Evidence from the emerging market
Yalid 
, Ryan Aditama , Sindi, Husni Tamrin, Iswandi
Abstract
The phenomenon of law related to the capital subscribed and fully paid up company is limited liability companies in Indonesia, many of which are not real. The aim of this research is to answer the question: "What is the legality and legal consequences of an establishment with a fictitious authorized capital?". The research was conducted via the study of literature with this type of normative legal research supported by an empirical approach. The results of the research contribute to knowledge that the responsibility of a limited liability company with a capital payment basis is fictitious when the establishment does not essentially meet the validity of the establishment of the limited liability company itself, whether based on terms “materially” or “formally”. The terms formilnya (“formally”) depositing of the authorized capital must be issued and paid-up in full. Although the capital is fictitious or not real, if it has been approved by a legal entity, then it remains as a legitimate legal entity, but the substance of it is a limited liability company. Depositing the authorized capital which is not real contradicts the nature of the limited liability company as a legal entity.
Keywords: Law, Responsibility, Limited Liability Company
Authors’ individual contribution: Conceptualization — Y.; Methodology — Y.; Validation — R.A. and S.; Formal Analysis — Y.; Investigation — H.T. and S.; Resources — S. and I.; Data Curation — Y.; Writing — Original Draft — Y.; Writing — Review & Editing — Y.; Supervision — Y.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: K0, K2, K3
Received: 11.02.2021
Accepted: 02.08.2021
Published online: 04.08.2021
How to cite this paper: Yalid, Aditama, R., Sindi, Tamrin, H., & Iswandi. (2021). The responsibility of a limited liability company with authorized fictitious capital: Evidence from the emerging market. Corporate Law & Governance Review, 3(1), 43-52. https://doi.org/10.22495/clgrv3i1p4
Amount: 14 EUR
