Did you know, the existence of business law in Indonesia can protect you from various potential losses. Remember, in running a business, there will certainly be various challenges and this can be minimized with legal protection. Business law itself consists of two different things, namely law and business, where each definition has its own meaning. According to a legal expert, HMN Purwosutjipto, S.H., law is all norms, which by the state authorities or community authorities are declared or considered as binding rules for some or all members of the community, with the aim of establishing a system desired by the authorities. Meanwhile, business can be defined as all activities that involve the provision of goods and services needed and desired by others with the aim of making a profit. Then, what is business law? Below we will explain more about the definition, purpose, function, and other important things related to business law. Check out the explanation until the end!
What is Business Law?
In general, business law is a set of rules that govern business activities so that they run according to the established corridors. Like laws in other fields, business law is written in writing. Its application is also intended to protect, supervise, and regulate all activities related to industrial trade, both for goods and services. Apart from the general point of view, there are a number of other definitions of business law from a number of experts, including:
Munir Fuady
According to Munir Fuady, business law is a form of law enforcement that regulates the procedures for implementation, affairs, and economic activities. This includes finance, trade, industry, and other matters related to the exchange of goods and services.
Dudung Amadung Abdullah
Dudung Amadung Abdullah said that business law consists of rules that regulate everything that covers business activities. These rules are made so that entrepreneurs can manage business fairly. Business law can also be interpreted as law that comes from customs, agreements, contracts, and legislation.
Law (UU) No. 8 of 1999
The Indonesian government has also established business law through legislation, namely in Law No. 8 of 1999. This regulation states that it is important for entrepreneurs to master the laws related to their fields. This is because business law has the responsibility of regulating business so that it runs orderly, smoothly, and does not harm.
What are the Purpose and Functions of Business Law?
Business law is created to regulate and protect businesses from various risks that may occur in the future. Here are some business law objectives that KH pals need to know:
- Ensure the security function of the market mechanism is smooth and efficient;
- Protects all kinds of businesses, from small to large;
- Assist in the improvement of the financial and banking system;
- Provide protection to actors in the economic field;
- Creating a safe and fair business for all business actors.
While the functions of business law include:
Protecting Companies and Employers
One of the functions of business law is to protect companies and entrepreneurs in it. This is because business law has regulated how to run a business in a fair and orderly manner in accordance with applicable guidelines. With the law, you as a business owner can avoid legal disputes or accidents that may occur without your knowledge. So, obstacles in business that can cost business owners in terms of time, money, and resources can be minimized. You can be more focused and calm in running your business because you already have legal protection.
Organizing Business Activities
The next function of business law in Indonesia is that it can help you organize business activities. This is because business has covered various topics. Starting from hiring employees, protecting employee rights, business contracts, business property rights, business taxation, to various business laws in general. That way, your business operations can run smoothly according to the applicable rules. If you obey business laws, the business you manage also avoids various potential losses because it is well protected. It is different if the business you manage is not registered with the relevant institutions so that it is included in an illegal company, you will not be able to minimize potential losses because it is not protected by law In the future, this illegal company can be dragged into legal problems because it has violated the applicable provisions. .
Employers’ Information Sources
The existence of business law in Indonesia can also be a source of information for entrepreneurs. You can understand various important aspects of running a business from business law. Starting from business agreements or contracts, legal protection obtained by businesses, financial arrangements and taxation, to other important business-related matters. Another most important thing is that you can understand what are the obligations and rights as a business owner. So, you can run a business in a fair, honest, and law-abiding manner, so that the workforce in it also feels prosperous and treated properly.
Scope of Business Law in Indonesia
Business law itself has a fairly broad scope and has been regulated in law. Quoted from the Journal of Business Law and Regulation, the scope of business law includes:
Business Actors
The first scope of business law is business actors who can be individuals or business legal entities. Both in the form of legal entities and those that are not, namely limited liability companies, foundations, cooperatives, firms, CVs, and civil companies.
Business Actions
The next scope of business law is the actions of business actors consisting of contracts or agreements, export-import, environment, labor, tax, business competition (antitrust), investment, consumer protection, and capital markets.
Assets (Wealth) of Business Actors
Another scope of business law is the assets or property of business actors. This aspect includes property, agrarian, intellectual property rights (HAKI), and collateral.
Capital (Financing)
Capital aspects include banking, non-banking financing, hire-purchase leasing, venture capital, and factoring.
Sources of Business Law in Indonesia
In its preparation, business law in Indonesia has various sources as its basis. KH Buddy needs to know that the source of law is “where the rules that can be made into law are found”. Then, what are the sources of business law in Indonesia? Here is the explanation:
Source of Material Law
The source of material law is a source of law based on the material that becomes law.
Source of Formil Law
Judging from the way it is formed, the sources of formal law consist of:
Law
Laws in the material sense are all regulations issued by the government that are binding and laws in the formal sense are laws made by the government in collaboration with the DPR.
Habits
Customary law is the oldest source of law. Yes, a custom can become law when an act is repeatedly done over a long period of time without stopping.
Treaty
Treaties are international agreements that are bilateral, regional, or multilateral in nature.
Jurisprudence
Jurisprudence is the decision of a legal case by referring to previous judicial decisions in the same case.
Doctrine
Doctrine is the opinion of experts on a legal case whose expertise is recognized academically and scientifically. In business law there are for example the opinions of Richard Posner, Thomas Ulen, Prof.Dr. Mariam Darus Barul Zaman, Prof. Erman Rajagukguk, and others.
Examples of Sources of Business Law in Indonesia
In Indonesia itself, the sources of law in Indonesia that come from legislation include:
Civil Code (KUHPerdata)
This source of law regulates relationships, both relationships over property and between individuals and legal entities. In the Civil Code, there are rules regarding buying and selling, leasing, lending and borrowing (including credit), and so on.
Kitab Undang-Undang Hukum Pidana (KUHP)
The Criminal Code is a source of business law regulating criminal offenses in business, such as fraud.
Kitab Undang-Undang Hukum Dagang (KUHD)
In this case, KUHD regulates trade issues specifically that have not been regulated in the Civil Code, such as the form of business entity including CV and Firm. Those are some things about business law that KH pals need to know, starting from understanding, objectives, functions, sources, to examples.
READ ALSO: The Importance of Knowing Legal Issues for Businesses
By knowing the above, it is hoped that KH Friend will begin to understand that the law in business is an important thing that must be considered in carrying out business activities. By understanding it, KH Friend can minimize the risk of mistakes and business failures by using the law.
KH Contact
Well, for KH pals who are still worried about business problems and need legal rules to protect and develop business, just consult with Kontrak Hukum! In order to make it easier for businesses to run their business, we present the first digital subscription service in Indonesia called Digital Legal Assistant (DiLA) for all business needs unlimited, ranging from contracts, notary services, legal research, finance, tax reports, and many more. For more information about the service and booking, please visit this page. Or if you still have other questions, don’t hesitate to consult with us at Ask KH or via Direct Message (DM) to Instagram @kontrakhukum.
