Legal Protection for Minority Shareholders in Corporate Decision-Making

Abstract

The protection of minority shareholders is a fundamental aspect of corporate governance that ensures fairness and balance in decision-making processes within limited liability companies. In Indonesia, although the Company Law No. 40 of 2007 has explicitly regulated the rights and legal standing of minority shareholders, practical implementation often remains ineffective due to dominant control by majority shareholders and limited enforcement mechanisms. This research aims to analyze the form and effectiveness of legal protection afforded to minority shareholders in corporate decision-making and to identify the legal remedies available when their rights are violated. The study employs a normative juridical method with a statutory and conceptual approach, supported by a comparative analysis of relevant doctrines and case law. The results indicate that minority shareholders possess several legal instruments, such as the right to file derivative suits, the right to demand annulment of general meeting resolutions, and access to judicial protection under the Company Law. However, these protections are still constrained by procedural barriers, lack of awareness, and weak corporate governance practices. This research contributes to the development of corporate law by proposing the need for a more effective supervisory mechanism and judicial practice that genuinely upholds the principles of justice and equality among shareholders. The study concludes that strengthening legal certainty and improving enforcement institutions are essential to ensure proportional protection for minority shareholders in Indonesia’s corporate system.