Company liquidation in Indonesia | Procedures, period, and points to note
The company liquidation procedure in Indonesia is
There are many differences from the procedures in Japan, and the process takes a long time, so advance preparation and correct understanding are essential.
Therefore, in this column, we will explain the basic process and points to note regarding company liquidation in Indonesia.
1. What is "liquidation" in Indonesia? meaning and purpose
“Liquidation” = Procedure for dissolving a company and extinguishing its corporate status
What is company liquidation in Indonesia?Procedures for dissolving a company and extinguishing its corporate statusis。
Specifically, the local company law strictly stipulates the process from resolution of dissolution to final cancellation.
It is mainly used for the following purposes:
- Organization of group companies
Simplification of holding structure, etc.。 - cost reduction
Reduce personnel costs, management costs, etc. by integrating multiple companies into one company through business transfer, etc., and liquidating companies that are no longer needed.。 - Responding to laws, regulations and business environment
Company survival due to regulatory changes or business withdrawalDeletion of corporate status when it is no longer necessary。
2. Difference between liquidation, bankruptcy, and dormancy / Benefits of liquidation
Below is a summary of the differences between liquidation, bankruptcy, and dormancy in Indonesia.
| procedure | Overview and features |
| liquidation |
The companyIf not in excess of debtHow to extinguish a corporation in。 |
| bankruptcy |
The companyIn case of excess debtProcedures to be followed。 |
| hibernate |
Under the Companies Act,There is no system called dormancy.。 |
“Liquidation” after eliminating debt through DES (Debt to Equity) etc.
From the above background, in Indonesia,
There are many cases where "liquidation" is chosen because it is "easier to control" and "easier to understand the schedule" on the company side.
Even if you are in debt,“Liquidation” after eliminating debt through DES (Debt to Equity) etc.You can also consider doing this.
3. Flow of “liquidation” procedures in Indonesia
In general, on average, from the time the necessary materials are collected until the legal conclusion2Year and a half levelIt takes a period of。
| procedure | Procedure details | Estimated period |
| 1 |
Resolution of the 1st General Meeting of Shareholders (Nomination of Liquidator) |
10About business days |
| 2 |
Newspaper announcement regarding the start of liquidation |
60Waiting for days |
| 3 |
Deletion/closure of various accounts |
10~30 business days |
| 4 |
Resolution of the 2nd general meeting of shareholders (approval of residual assets distribution plan) |
10About business days |
| 5 |
Newspaper announcement regarding residual property distribution plan |
60Waiting for days |
| 6 |
NPWP BADAN (Corporate Tax Number Card) Cancellation Procedures |
1Years and above~ |
| 7 |
Resolution of the 3rd general meeting of shareholders (resolution of completion of liquidation) |
10About business days |
| 8 |
Newspaper announcement regarding completion of liquidation |
5About business days |
| 9 |
Issue of Ministry of Justice decision regarding completion of liquidation (legal completion of liquidation) |
2About 5 months |
4. Points for smooth “liquidation”
Creditor/shareholder control
Before entering into liquidation,Form an agreement in advance with creditors and shareholdersIt is very important to keep。
Even small creditors are at risk of delaying the progress of the situation or starting a dispute.
As a resultcourt involvementand finallyBankruptcy proceedingsThere is a risk that you will be forced to take。
5. Frequently asked questions (FAQ)
Q. What should I do first before starting the liquidation process?
A. FirstAccurately understand assets and liabilities and retirement allowance obligations on the balance sheetdeath,
It is important to avoid insolvency and advance consensus building with stakeholders.。
If you have excessive debts or conflicts with creditors, you will not be able to proceed with the procedure in the first place.
Q. When should an employee be fired?
A. at the latestWithin 2 months from the start of liquidationis the standard。
It is necessary to close the WLK (employment report) account after the resolution of the first general meeting of shareholders in liquidation (immediately after the start of liquidation).
This is because proof of the employee's dismissal must be submitted to the Ministry of Labor at that time.。
6. To prevent problems and prolongation of “liquidation” procedures in Indonesia
As mentioned above, in Indonesia, where "dormant" is not an option under the Company Law, leaving a corporation that is no longer needed only postpones risks.
In addition, even if you start "liquidation", we will be unable to manage schedules and respond to the Ministry of Labor, tax office, etc.
It is not uncommon for local irregularities to occur.
To date, we have supported the liquidation procedures of approximately 10 Japanese companies.
By leaving it to us,
Handled by expatriates and the Japanese head officeSignificantly reduce the burden of dealing with complicated proceduresdeath,Let you concentrate on your core businessIt is possible.
Advice on avoiding insolvency (considering DES, etc.) and timing of employee dismissal, etc.Propose a strategic plan that suits your practiceI will.
Please feel free to contact us first.
[For inquiries, please contacthereFrom (free initial consultation!)]
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