10.47313 Determination of Beneficial Ownership in A Partnership Firm from The Perspective of Joint and Several Liability of Partners

Determination of Beneficial Ownership in A Partnership Firm from The Perspective of Joint and Several Liability of Partners

Abstract

This paper discusses about the legal implications of the obligation to determine the
beneficial owner in a partnership firm, within the context of the joint and several
liability of partners as regulated in Article 18 of the Indonesian Commercial Code
(KUHD). The study is motivated by increasing demands for business transparency
in the digital and globalization era, as well as the introduction of new regulations
through Presidential Regulation No. 13 of 2018 and Minister of Law and Human
Rights Regulation No. 15 of 2019. As a non-legal entity business form, a firm is
fundamentally based on the principle of joint and unlimited liability among its
partners. However, with the mandatory determination of a beneficial owner, there
arises a potential disharmony between private law, which governs joint and several
liability, and public law, which demands the identification of specific individuals
as the ultimate controllers. This study employs a normative juridical approach by
examining relevant laws and regulations. The findings indicate that the obligation
to identify a beneficial owner has significant legal implications, including clarifying
individual accountability within the firm, reinforcing the principle of piercing the
corporate veil, and potentially shifting the traditional principle of joint and several
liability. Therefore, regulatory harmonization is necessary to avoid normative
conflicts and ensure legal certainty in business practices, particularly for micro,
small, and medium enterprises (MSMEs) that commonly use the partnership form.
Keywords: partnership firm, beneficial owner, joint and several liability, corporate
law, transparency