Legal review of share divestment in limited liability companies in Indonesia based on the principles of good corporate governance

Abstract

Share divestment is a strategic corporate actionrnaimed at enhancing business focus, liquidity, and capital efficiency. InrnIndonesia, this process is not merely a financial transaction but involves arnseries of legal and procedural obligations governed by the Company Law (UUPT)rnand company articles of association. Divestment in State-Owned Enterprisesrn(BUMN) or private limited companies must align with Good Corporate Governancern(GCG) principles and the Business Judgment Rule (BJR) to mitigate legal andrnfinancial risks. This study aims to explore the procedures, legal requirements,rnand consequences of share divestment within Indonesian limited liabilityrncompanies. Emphasis is placed on the transfer of rights via authentic orrnprivate deeds, mandatory notifications to the Ministry of Law and Human Rights,rnand the impact of violating shareholder rights. The paper highlights thernimportance of transparency, proper documentation, and regulatory compliancernthroughout the divestment process. It concludes that strategic, well-documentedrndivestment aligned with GCG and BJR can support corporate stability andrnlong-term growth.