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Company Dissolution in Indonesia

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Company dissolution in Indonesia is one of the most cumbersome legal processes.

Reasons for Company Dissolution in Indonesia

Running a business in Indonesia is never easy, and entrepreneurs face many challenges. Unfortunately, even the process of dissolving a company in Indonesia is not hassle-free neither for local (PT) nor for limited liability companies (PT PMA).

There are plenty of reasons for a company to wind up or dissolve. The most common ones include the following:

  • An expired incorporation term
  • An expired business license (it can be a PT PMA business license or other operational licenses). Some cases may involve a license being revoked
  • A company has been dormant or has not been actively operating for the last three years
  • A company or a business is not in compliance with Indonesia Law
  • A company is bankrupt and unable to pay the bankruptcy with its assets

Company Dissolution Process in Indonesia

To be able to dissolve a company in Indonesia, a business is obliged to go through a liquidation process.

Liquidation, in other words clearing and settling the assets and liabilities of a company, is the only way how both active and inactive businesses in Indonesia can come to the end of their legal existence.

Who can be a liquidator? A legal consultant, a lawyer or the Board of Directors (BoD) can be a legal liquidator during the process of winding up a company.

The appointed liquidator is responsible for making an announcement about the dissolution in the State Gazette and newspaper. Failure to do so will result in an ineffective liquidation.

In general, the company dissolution process will take between 6 months and 1 year to complete. According to Act Number 40 of 2007, to dissolve a company efficiently and seamlessly, the process is as follows:

  1. The liquidator should make an announcement about the company liquidation in the State Gazette and newspaper.
  2. Within 30 days following the company liquidation, the liquidator must register the proposed liquidation with the Indonesian Ministry of Law and Human Rights.
  3. After that, the liquidator will proceed to register the company’s obligations of settlement and assets to creditors.
  4. The General Meeting of Shareholders (GMS) or court will be informed about the final result of the liquidation, so that they can approve it.
  5. The approved liquidation is required to be be reported to the Indonesian Ministry of Law and Human Rights. Following this, an announcement will be made in the newspaper within 30 days.
  6. The Indonesian Ministry of Law and Human Rights will go on to terminate the company’s legal state, record the expiry of its legal status, and make an announcement in the State Gazette.

Benefits of Closing a Company with Cekindo

Liquidator Services - iconLiquidator Services

An accountable liquidator accepted by the General Meeting of Shareholder (GMS) or District Court must take part in the whole procedure. Cekindo can act as a liquidator in Indonesia and provide complete assistance in conducting all the steps of the liquidation process.

 

One-Stop Solution - iconOne-Stop Solution

Our portfolio is not limited to liquidator services only. As a leading one-stop consultancy provider in Indonesia, we will take care of the whole process of termination of your company’s legal status in Indonesia.

 

Fast Process - iconFast Process

The duration of terminating a company in Indonesia depends on many external conditions. However, with Cekindo, you can be sure that no major delays will occur. Thanks to our long existence on the Indonesian market as well as a vast network of contacts, we guarantee the fastest process of dissolving a company.

 


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