Application of the Principles of Business Judgment in the Authoritative Function of Directors of Limited Liability Company in Singaporean and Indonesian Legal Perspectives

Daniel Hendrawan, Emilia Fitriana Dewi, Subiakto Sukarno and Isti Raafaldini Mirzanti

Academic Journal of Interdisciplinary Studies, 2020, vol. 9

Abstract: The purpose of this study is to analyze the functions and authority of the director of limited liability company in applying business judgment principles, by taking comparative law studies in Singapore's common law and in Indonesia's civil law. By taking emphasis on the authority of directors in representing limited companies both in and out, there are several authorities that are regulated in it. This study was conducted with a comparative law approach, with descriptive qualitative analysis. The results showed that sometimes directors act outside their authority and can harm a limited liability company. On the other hand, that there are actions of the board of directors that are in accordance with their authority but still harm the limited liability company. In this case, the shareholders often hold accountable. In corporate law there is a principle of business judgment where a director cannot be held accountable if the directors are proven to have good faith. The difference between Singapore law and Indonesian law in regulating the authority of directors is the good faith assessment held by directors.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:bjz:ajisjr:1897

DOI: 10.36941/ajis-2020-0044

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