Juridical Analysis of the Capital Access Mechanism for BUMDes Without Legal Entity Status

In the era of autonomy, local areas in Indonesia have been able to focus on valuable principles to achieve prosperity and improve the economic well-being of communities through the empowerment of villages. Villages are recognized as social units based on customs and laws, allowing them to govern their own affairs based on local traditions. The Indonesian government has introduced regulations, such as the Village Law of 2014, providing a new framework for village institutions like the Village Owned Enterprises (BUMDesa) to support local development. BUMDesa play a strategic role in rural areas by utilizing village resources and human capital to improve the economy and meet community needs. However, challenges arise for BUMDesa without legal status, as they are unable to access funding from banks due to the lack of legal recognition. To establish legal status, BUMDesa must meet certain requirements, including approval by village meetings, notary deeds, registration with the Ministry of Law and Human Rights, and the creation of organizational structures. Without legal status, BUMDesa face limitations in managing assets and obtaining financial assistance, resulting in personal liability for losses incurred by the organization's operators. The lack of legal recognition for BUMDes hinders their ability to manage assets, access financial aid, and differentiate between personal and business assets, leading to potential personal liability for financial losses. Ultimately, legal status is essential for BUMDes to unlock opportunities for growth, financial stability, and legal accountability