RUU on Business Entities Seeks to Convert CVs, Firma, and Cooperatives into Legal Entities

The Ministry of Law is currently preparing a Draft Law on Business Entities (“RUU”). According to Andi Taletting Langi, Director of Business Entities at the Directorate General of General Legal Administration of the Ministry of Law, RUU is intended to codify the laws and regulations governing business entities, including limited liability companies, sole-shareholder companies, civil partnerships, firma partnership, limited partnership (Commanditaire Vennootschap - “CV”), cooperatives, and village-owned enterprises.

Andi stated that the drafting of this regulation is intended to strengthen the regulatory framework governing unincorporated business entities. According to him, the fragmented and non-integrated regulations applicable to such entities have long created legal uncertainty. As a result, the mechanisms for the management and supervision of business entities have not operated optimally.

According to Andi, addressing these issues requires an integrated and comprehensive policy approach. The Ministry is therefore considering a policy direction under which all business entities would be accorded legal entity status, thereby providing a clearer legal framework and governance mechanism. “However, this must be supported by further study, understanding, and mutual agreement among the relevant stakeholders,” he stated on Friday, 5 June 2026.

Andi further explained that the Ministry is still conducting studies and consultations with experts and other relevant stakeholders regarding the proposed legislation. The feedback received will serve as a basis for the Ministry of Law’s consideration in preparing the RUU before it is submitted to Parliament. “The proposal remains under discussion,” he said.