This study explores the relationship between law and the challenges faced by sole proprietorships in Indonesia, aiming to identify legal mechanisms to prevent and overcome critical issues. Sole proprietorships play a crucial role in Indonesia’s micro, small, and medium enterprise sector but face obstacles such as unlimited personal liability and regulatory compliance difficulties. The study hypothesizes that specific legal frameworks can mitigate these risks and that a review of existing laws will reveal gaps needing improvement. Addressing these legal challenges is essential for ensuring business sustainability and economic stability. A comparative analysis of sole proprietorship laws in other countries offers insights into best practices that Indonesia can adopt. Key recommendations include introducing limited liability options, simplifying regulations, and improving legal access for sole proprietors. By implementing these reforms, Indonesia can create a more supportive business environment, reducing risks and fostering sustainable economic growth.
Winarko et al. (Sun,) studied this question.