Investors who commence the process of company liquidation in Indonesia have to go through several stages and mandatory steps. The decision to close a company in Indonesia can be motivated by many business reasons. Regardless of motive, entrepreneurs are required to follow the Company Law.
For those interested in winding up a company in Indonesia, our team specializes not only in company incorporation in Indonesia, but also in company closures.
If you need more information about company liquidation in Indonesia, as well as dedicated assistance during the process, please feel free to ask us your questions. We can help you open a company as well as close one.
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Company liquidation in Indonesia – main issues to consider
The decision to close down a company can be voluntary (when decided by the company’s board) or non-voluntary (when ordered by a court).
Non-voluntary dissolution can also occur when the company is bankrupt, and the Indonesian business is declared insolvent. In other cases, non-voluntary closures can take place when the company’s business license is revoked.
In most cases, the process to close a company in Indonesia will take place as a result of a performance evaluation and a decision made by the company’s shareholders. When a business is no longer profitable, the decision to wind up a company in Indonesia can be one that is suitable for the shareholders’ best interests.
Essential steps when closing a company in Indonesia
The liquidation process involves a full inventory of the company’s assets, followed by selling these to make the necessary payments towards any creditors. Any remaining assets (if any) are distributed among the company’s shareholders.
A mandatory step for company liquidation in Indonesia is the appointment of the liquidator. This is the individual who will handle the entire process and will also issue the final report after the completion of the liquidation, after which another stage related to winding up a company in Indonesia can commence – its deregistration.
Our team, which specializes mainly in company formation in Indonesia, can also help you with the liquidation stage, along with all the steps required to close a company. Below, we list some of the main issues to consider for the liquidation:
- Appointing a liquidator is a mandatory step. While this role can be fulfilled by a company director, there are instances where he is appointed by court;
- The winding up process can be completed once the creditors’ claims have been settled. An exception applies in the case of a bankrupt company, however, our team can give you more information about the steps that apply in this case;
- A final and detailed report is submitted to the tax office. This is part of the final company filings, which are mandatory;
- The liquidation process can be a lengthy one, depending on the company’s situation, the number of creditors, how the asset distribution will be handled, and other details.
Court ordered company dissolution in Indonesia
A district court can dissolve a company when:
- A prosecutor decides that the company has violated the public interest;
- A party makes a request to dissolve the company based on the fact that its establishment deed is false;
- The shareholders make such a request to the court to dissolve the company because it is no longer manageable.
When the dissolution is ordered as highlighted above, the appointment of the liquidator will also be stated in the court order.
Another possibility to dissolve the company occurs when the legal entity’s incorporation period has expired. Our team, which can help you open a company in Indonesia, can also assist you close down a business.
If you are interested in information about other topics, such as company relocation to the country, our immigration lawyers in Indonesia can answer your questions. Moreover, our accountants in Indonesia can provide tailored packages for your business.
Contact us for details on the requirements for company liquidation in Indonesia and to find out more about how we can assist you.