ENGLISH EDITION

GENERAL PROCEDURES FOR LIQUIDATION OF A COMPANY IN INDONESIA

Liquidation is the process of administration and settlement of a company’s assets and liabilities which is handled by a “receiver in bankruptcy” (within the scope of Bankruptcy Law) or a “liquidator” (outside the scope of Bankruptcy Law) where the proceeds of the settlement will be used to pay debts of the debtor to its creditors.

In case a company is dissolved through resolution of a General Meeting of Shareholders (“GMS”), the company must be liquidated after dissolution and the GMS shall appoint a liquidator which can be a professional or the Board of Directors acting as the liquidator.

In general, there are key steps in the liquidation process under the Company Law as follows:

1. Collection and registration of the company’s assets and debts.
2. Settlement of creditors obligations.
3. Distribution of remaining liquidation assets to the shareholders.
4. Report of the completion of liquidation to the GMS or the court as applicable.
5. Within 30 (thirty) days after the GMS or court validating the completion of liquidation, the liquidator is required to make a publication of the liquidation completion announcement in a newspaper as well as a liquidation completion notice to the Minister of Law and Human Rights (“MOLHR”).
6. The MOLHR will record the termination of the legal entity status in the Company Registry.
7. Announcement of the termination of the company’s legal entity status in the State Gazette.

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Prepared by co-writer Azriel Viero, Universitas Padjajaran – Paralegal

Reference:

1. Law Number 40 of 2007 Regarding Limited Liability Company (“Company Law”).
2. Law Number 37 of 2004 Regarding Bankruptcy and Suspension of Payments of Debts (“Bankruptcy Law”).