Equivalence of State Capital to the Company

The inconsistency of the provisions governing state finances, namely Law No. 17 of 2003 concerning State Finances with provisions governing corporate capital as stipulated in Law No. 47 of 2007 concerning Limited Liability Companies became a stumbling block in an effort to increase professionalism in the management of State-Owned Enterprises in Indonesia. The theoretical problems arising from the inclusion of state capital in SOEs are considered as state assets under Law No. 1 of 2004 concerning the State Treasury, whereas theoretically the Legal Entity Theory applies as stipulated in company law.