| Home

Overview


Original Research

THE INSTITUTIONAL MODEL OF VILLAGE-OWNED ENTERPRISES (BUMDes) AS LEGAL ENTITIES IN INDONESIA

MUHAMMAD IKHSAN KAMIL 1, KURNIAWAN 2, HIRSANUDDIN 3, and MUHAIMIN 4.

Vol 19, No 05 ( 2024 )   |  DOI: 10.5281/zenodo.11203350   |   Author Affiliation: Doctoral Program in Law, Faculty of Law, University of Mataram, Indonesia 1,2,3,4.   |   Licensing: CC 4.0   |   Pg no: 287-299   |   Published on: 16-05-2024

Abstract

The Institutional Model of Village-Owned Enterprises (BUMDes) as Legal Entities in Indonesia. Village-owned enterprises (BUMDes) are productive platforms in fostering economic empowerment in rural areas. The implementation of BUMDes is regulated in legislation, including Article 117 of the Job Creation Law, which amends Article 1 number 6 of the Village Law and provides a new operational definition for BUMDes. However, it does not clarify the basic concept of BUMDes itself and instead opens up room for multiple interpretations regarding the form of BUMDes businesses and the opportunities for private ownership within them. This research aims to discover the essence of BUMDes as legal entities in Indonesia, analyze the implementation of BUMDes regulations in Indonesia, and find the concept of the appropriate Institutional Model for BUMDes in Indonesia. The methods used to obtain this information include using various approaches commonly used in legal research, such as the statute, case, historical, comparative, and conceptual approaches. The research concludes that BUMDes is a business entity established not only to seek profit but also to provide services to the community and stimulate the local economy. BUMDes is one form of social enterprise, an institution established to address social issues by creating added value, managing potential, and creating added value that benefits the community as much as possible. Before the Job Creation Law, BUMDes sought to be defined in several legal forms. As a consequence of BUMDes being referred to as a business entity in Law No. 6 of 2014, it has been associated with State-Owned Enterprises (BUMN), Limited Liability Companies (PT), and Cooperatives. However, comparing BUMDes with BUMNs is not accurate, as their objectives differ. While BUMN aims to maximize profits, BUMDes also serves social objectives. Similarly, comparing BUMDes with State-Owned Enterprises (Perum) is inaccurate due to differences in ownership structure. The state wholly owns Perum, whereas BUMDes follows a participatory concept with community ownership. To achieve the welfare of the community and ensure they benefit from BUMDes, the researcher proposes a suitable institutional model for BUMDes, including formulating the basic principles of the BUMDes institution, categorizing BUMDes, outlining the establishment stages of BUMDes, and defining the organizational structure of BUMDes as a legal entity.


Keywords

BUMDes, Legal Entity, Institutional Model.