Commercial and Non Commercial Entities: Foundation ... · 23/02/2015 · Commercial and Non Commercial Entities: Foundation, Association, Public Service ... Ideal Economics L.E

Yetty Komalasari Dewi Lecture 3, February 25, 2015

Commercial and Non Commercial Entities:

Foundation, Association, Public Service Entity, Cooperative

WHAT IS COMMERCIAL LAW?

Copyright of Yetty KD

The definition/scope:

Commercial Law (sometimes known as business law) is a body of law which governs business and commercial transactions. It is often considered to be a branch of civil law and deals both with issues of private law and public law; ;

•  Business Law refers to the laws that apply to business entities, such as partnership and corporations


Black Law’s Dictionary:

Commercial Law is the substantive law dealing with: -the sale and distribution of goods, -the financing of credit transactions on the security of the goods sold, and -negotiable instruments.


INDONESIA ?


Contract law arising in the field of business or commercial [hukum perikatan yang timbul khusus dalam lapangan perusahaan] – HMN Purwosutjipto

Legal rules (written or unwritten) which regulates all activities in the field of commerce or trade [Seperangkat aturan hukum (tertulis-tidak) yang mengatur semua kegiatan dibidang perdagangan] – Apeldoorn

Law regarding forms of business entity [Hukum mengenai bentuk-bentuk perusahaan] – Abdul Kadir


3 ELEMENTS OF LAW?

LEGAL OBJECT ?

LEGAL RELATIONSHIP ?

LEGAL PERSON ?

Copyright of Ye7y K.Dewi

WHAT IS THE RELATIONSHIP BETWEEN CIVIL CODE AND COMMERCIAL CODE ?


READ ARTICLE 1

OF COMMERCIAL CODE ?


COMMERCE = BUSINESS

DOING / RUNNING A BUSINESS….


BUSINESS ENTITIES/ASSOCIATIONS/ORGANIZATIONS

VS LEGAL ENTITIES ?


Enterprise/Business (Commercial)-Association/Organization: 1.  Any organization or business activity both for-profit and is

engaged in the production (economics); 2.  Any form of business that is conducting any kind of business

that are permanent, continuous, and established, working and domiciled in the territory of Indonesia with the aim of obtaining gains and/ or profit [Law No. 3/1982 –Mandatory Company Registration]

3.  Each form of business activities that are permanent and continuous in order to gain benefits and/ or profits, whether held by individuals or businesses in the form of legal entity or non-legal entity, established and domiciled in the territory of the Republic of Indonesia [Law No. 8/1997 – Company Documents]


1.  a lawful or legally standing association, corporation, partnership, proprietorship, trust, or individual, has legal capacity to (1) enter into agreements or contracts, (2) assume obligations, (3) incur and pay debts, (4) sue and be sued in its own right, and (5) to be accountable for illegal activities [Legal Entity: Black’s Law Dictionary]

2.  an association of people or special-purpose fund (e.g. foundation) that is recognized by law as having legal personality. It differs from other associations of people in that it possesses legal capacity and can appear before the courts as plaintiff or defendant (“parteifahigkeit”, i.e. capacity to be a party in court) [Artificial/ Juristic Person]


LEGAL PERSON ?

Juris1c person (ar1ficial person/legal en1ty)

Natural person (human-‐being/man)


Juristic Person

× a body of persons, a corporation, a partnership, or other legal entity that is recognized by law as the subject of rights and duties – called also artificial person, fictitious person. [Merriam Webster’s Law].

Juridical Person

•  entity (such as firm) other that a natural person (human being) created by law and recognized as a legal entity having distinct identity, legal personality, and duties and rights; also called artificial person, juridical entity, juristic person, or legal person.


When “commerce” and “commercial activities” were repealed from the

Commercial Code à Ministry of Justice introduced criteria on

“doing business”


An activity is considered as “business” IF:

1. continuity 2. legal 3. as a profession 4. profit oriented

+ Book-keeping


OrganizaKon/ EnKty/ InsKtuKon

Goal

Ideal

Economics

L.E.

Non-‐L.E

-‐PT/LLC -‐CooperaKves

-‐Sole Proprietorship -‐Civil Partnership -‐Firma -‐CV

L.E

Non-‐L.E

-‐FoundaKon -‐Incorporated AssociaKons -‐Community-‐ OrganizaKons


FOUNDATION ? PUBLIC SERVICE ENTITY (BLU) ? ASSOCIATION (VERENINGING) ? COOPERATIVE ?


Commercial and Non Commercial Entities:

FOUNDATION:

s  Governed by Law No. 16/2001 as amended by Law No. 28/2004; Gov. Reg. No. 63/2008.

s  Defined as a non-profit, non-membership legal entities established for social, religious or humanitarian purposes.

s  3 organs: Advisory Board (Pembina); Management Board; Supervisory Board.

s  Members of the Boards should not receive any salary or compensation in money.

s  Foundation IS NOT business-entities è permitted to engage in economic activities only through corporate subsidiary.


Legal Basis Foundation Engaging Business?

Art 3 (1): Foundation to conduct business activities to support the achievement of the aims and objectives by way of setting up a business entity and / or participation in an enterprise Art. 7 (1). Foundations may establish a business entity whose activities are in accordance with the aim and purpose of the foundation. (2) The foundation may invest in various forms of business that are prospective with a maximum of 25% (twenty five percent) equity of the total value of Foundation’s assets


Public Service Entity

•  Art. 9 (1) GR 74/2012:

•  Public Service Entity can charge the public in exchange for the goods / services provided

•  Art. 1 (1) GR No. 23/2005 concerning Financial Management of PSE:

•  Public Service Entity is government’s agency that was formed to provide services to the community in supplying goods and / or services without seeking for profit and base its activities on the principles of efficiency and productivity


ASSOCIATION (VERINIGING) •  LEGAL BASIS:

1. Chapter IX Art. 1653 -1665 Civil Code, 2.  Staatsblad 1870-64 Association with Legal Personality Status

(Rechtspersoonlijkheid van Vereenigingen) 3. Staatsblad 1939-570 jo 717 Indonesia Association (Inlandsche

Vereeniging). DEFINITION: s  Those 3 rules do not provide the definition of Association à they only

recognized incorporated association and unincorporated association. s  However it is usually defined as membership organization but not

permitted to engage in economic activities.


Associations (con’d):

Art. 1661 Civil Code: Members of association are not personally liable for the obligations of the association

Art. 1653 Civil Code: Besides the real partnership (eigenlijke maatschap), the law also recognizes group of persons as associations, either established or acknowledged by authorities as such; or allowed as legitimate; or constituted only for a certain purpose which is not contrary to the law or good morals


COOPERATIVES: •  Governed by Law No. 17/2012 •  legal entity established by

individuals or Cooperative legal entities, by the separation of its members assets as capital to carry on the business, which meets the aspirations and needs of economic, social, and cultural rights in accordance with the values and principles of cooperatives.

•  Governed by Law No. 25/1992

•  business entities consisting of individuals or cooperative legal entities with activities based upon principles of cooperation and family value.

•  Cooperatives is a legal entity


???


Wahyu & Bimo are “BFF” since they were in Junior High School and both finished their study at UI majoring in Law and Economics. Wahyu established a law firm “Wahyu & Associates”; and Bimo established a public accountant office “Bimo & Partners”.

Do you think Wahyu and Bimo could be classified as “doing or running a business” ?
