Reconstruction of Legal Policy for MSME Legality

Abstract

The enactment of the Sole Proprietorship institution within the Omnibus Law on Job Creation aims to facilitate ease of doing business for Micro and Small Enterprises (MSEs) by granting instant legal entity status. However, in its implementation, this single entity triggers doctrinal antinomies in corporate law and cross-sectoral disharmony. This juridical-normative research, utilizing statutory, conceptual, and comparative approaches, aims to analyse the legal implications of sole proprietorships on legal certainty, to formulate its policy reconstruction design, and how corporate crimes are handled in sole proprietorships. The results indicate that the ease of digital self-registration (instant formality) without verification by an authentic official triggers resistance from the banking industry due to perceived high legal risks. Furthermore, the low accounting literacy among MSE actors leads to the commingling of personal and corporate assets, threatening the collapse of the limited liability principle through the Piercing the Corporate Veil doctrine. This article rejects the trend of prior research that merely focused descriptively on administrative registration efficiency. The novelty of this study offers a policy reconstruction formulation through a transition toward the Guided Accountable Formality paradigm. This reconstruction is manifested through technological intervention via a unified micro-accounting application integrated into the OSS-RBA system as an asset segregation control instrument, alongside the implementation of a Self-Liquidity Guarantee Fund scheme to ensure legal protection for creditors and third parties.