Need Help Closing Your Company in Indonesia? We Can Help
When you need to close a company in Indonesia, you would need to undergo a process called liquidation in Indonesia.
Why A Company Would Need to Liquidate
Liquidating a company does not mean your business has failed. The closing of a company could be for several reasons. These include:
- You wish to withdraw from Indonesia market
- Your incorporation has expired
- Your business hasn’t complied with the local Indonesian law requirements
- Your business licenses have been repelled
- Your business hasn’t been active for 3 years
- Your company is, unfortunately, bankrupt
What Is Company Liquidation in Indonesia?
Liquidation means dissolution of the company as a legal entity which includes payment of obligations to creditors and distribution of the remaining assets to shareholders of the company. The liquidation process is initiated when your company is planning to end operations. You would need to sell your remaining assets. This is to pay off any debt you might still have. Your company is not planning to operate again in the future and you choose for the liquidation process. The company is still permitted to take legal action to the extent of issuing an order/liquidation.
Company liquidation in Indonesia must be done based on the Company Law No. 40 the Year 2007. Liquidators are appointed from the Board of Directors. For dissolution, you need to consult a lawyer or legal consultant and engage a Notary.
At 3E Accounting, our associate can be your legal consultant or liquidator.
Here’s what the 3 stages of liquidation process involve:
1. First Stage:
Announcement of newspapers and the Indonesian State News (“BNRI”) followed by a notification to the Minister to be recorded in the company register that the company is in liquidation (notification to the Minister is done by a notary through sisminbakum). The announcement explains the legal basis for dissolution, the procedure for filing bills, the period for filing bills and also the name and address of the liquidator. In line with this, the liquidator also records the assets of the company (assets and liabilities) including the recording of the names of creditors and their levels and other matters related to the management actions in the liquidation process.
It should be remembered that in outgoing correspondence on behalf of the Company, the phrase “in liquidation” must be added behind the name of the Company (ex: PT A in liquidation)
2. Second Stage:
Announcing in the newspapers and BNRI, this second announcement requires the liquidator to notify the Minister of the plan for the distribution of liquidated assets (this report is carried out by the liquidator by notifying a registered letter to the relevant Minister).
After 90 days have passed, the liquidator can make a settlement by selling assets that have previously been assessed with the services of an independent appraiser, followed by distributing the assets to their creditors. In the event that there is still residual wealth from the liquidation, the remaining balance must be returned to the shareholders.
3. The Third and Final Stage:
Conduct GMOS regarding the accountability of the liquidation process that has been carried out. In the event that the GMOS accepts the accountability of the liquidation process that has been carried out, it is followed by an announcement to the newspaper which is then followed by a notification to the Minister that the liquidation process has ended (notification to the Minister is done by a notary through sisminbakum,
the Legal Entity Administration System.
In the event that the announcement has been made, the Minister will record the expiry of the legal entity status of the company and erase the name of the company from the list of companies followed by an announcement in the State Gazette of the Republic of Indonesia until the liquidation of the company is settled and announced in the state news and additional state news and two newspapers. Until then, the company is considered to be still alive.
The liquidator is responsible for the announcements. The liquidation is not deemed effective until the report has been done.
What Liquidation Details Need to Be Reported
During the liquidation process in Indonesia, announcements must have the following details:
- Company name
- Legal basis of liquidation
- Name and address of the liquidator
- The submission procedure for claims
- Deadline for submission of claims
Bear in mind you cannot conduct any business activities during the liquidation process.
Need to Liquidate? Let Us Help You
Sometimes, a liquidation is unavoidable. If that is the case, let 3E Accounting make the process easier for you. We can be your legal consultant and assist with the liquidation process during this complicated and sometimes lengthy process. By working with us, you have access to the tools, resources, and all the support you need to make the process as smooth as possible. Let our team of experts guide you during the liquidation process in Indonesia. Contact us for a full range of our services today.