The Application of the Piercing the Corporate Veil Doctrine in Startup Fraud Cases in Indonesia.

Abstract

The rapid development of startups in Indonesia has introduced new

dynamics within corporate law. One of the major challenges is the rise of

startup fraud the misuse of corporate entities to deceive investors,

partners, or the public. In civil law, corporations enjoy the protection of

the principles of separate legal entity and limited liability. However, these

principles can be disregarded through the doctrine of piercing the

corporate veil, which applies when shareholders or directors exploit the

corporation as a façade for fraudulent acts. This research employs a

normative legal method with both statute and conceptual approaches,

analyzing relevant legislation, doctrines, and case law. The findings

indicate that the application of the piercing the corporate veil doctrine in

Indonesia remains limited but is increasingly relevant in protecting

investors in the startup ecosystem. This doctrine aligns with the principles

of good faith and civil liability as regulated in the Indonesian Civil Code

and Law No. 40 of 2007 on Limited Liability Companies.