Company Closure (Dissolve Company)
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Thinking about closing your company (company closure / dissolve company)?
Whatever the reason, Bizindo can provide advice and guidance for the best course of action for your particular circumstances.
Closing an Indonesian company involves legal, accountancy, tax, and audit processes. All these processes are handled and supervised by Bizindo’s in-house CPA, notary public, and legal officers.
- Legal Services: Due processes for a decision to close the company must be followed carefully, to ensure the legitimacy of decisions made by the company shareholders. The decision is then executed by Bizindo’s legal officers.
- Accounting, Tax, & Audit: Bizindo shall do a thorough overhaul of your company books, and ensure they are up to a standard that will withstand scrutiny or suspicion by any party. A tax audit shall be performed to determine if the Indonesian Tax Office is owed anything. Once the Bizindo tax audit is complete, full final accounts are submitted to the Tax Office, who may carry out their own audit within 12 months of receipt of the audit. Once cleared by the Tax Office, the process returns to the legal section for completion.
Legal Procedures and Mechanism of Dissolution of the Company:
- Approval of the General Meeting of Shareholders
- Appointment of Liquidator
- Announcement of Liquidation
- Submission of Creditors’ Claims
- Settlement of Claims and Accounts Receivables
- General Meeting of Shareholders Concerning Approval of Liquidator’s Duty and Effectiveness the Liquidation of the Company
The Estimated Time Frame on Dissolution Process:
Based on the steps to above, we estimate that the dissolution process will take at least 12 (twelve) months from the date of approval of General Meeting of Shareholders. This is with the assumption that during such period of time, all rights and obligations (i.e. claims and account receivables) of the Company to third parties are settled.
Background of Company Closure / Dissolve Company:
The general principle on dissolution of Limited Liability Company is stipulated under Article 143 paragraph (1) of Law No. 40 of 2007 regarding Limited Liability Company, which provides that the dissolution of company does not automatically erase the legal status of the company. The legal status would be lost at the end of the liquidation process and accountability of liquidator has been accepted by the General Meeting of Shareholder or District Court.
Article 142 of Company Law elaborates that a company can be dissolute based on the following occurrence:
- Based on the resolution of General Meeting of Shareholder;
- Due to the termination of the company’s duration as stipulated in the articles of association;
- Based on the court order;
- Due to the revoked bankruptcy statement based on binding order of the commercial court, and the bankrupt assets of the company is not sufficient to pay the bankruptcy cost;
- Due to the condition that the bankrupt assets of the company has been declared in the condition of insolvency as regulated in the Law regarding Bankruptcy and the Suspension of Debt Payment; or
- Due to the revocation of the company’s business permit, so that the company is obliged to conduct liquidation in accordance with prevailing regulation.
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