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Indonesian Company Deregistration

Updated:2018-8-1 12:22:07    Source:www.tannet-group.comViews:219

Indonesian company deregistration may occur due to the failure of the company to carry on business, lack of profits, inability to get along between shareholder or to pay its debts, or even corporate restructuring of the group to which the company belongs. The process of closing down a company is referred to as liquidation in common terms. However, companies can be liquidated either by deregistration or winding up. The following is an overview of Indonesian company deregistration.

Common Reasons for Dissolution
Law No. 40 of 2007, Article 142 stipulates that companies may only be dissolute by the following reasons:
(1) Bankrupts assets of the company declared in condition of insolvency;
(2) Due to revoked bankruptcy statement based on mandatory order of the commercial court;
(3) Bankrupt assets of company are not sufficient to pay bankruptcy cost;
(4) Termination of company duration as agreed in the articles of association;
(5) Resolution of general meeting of shareholders;
(6) Verdict from court ruling;
(7) Revocation of company’s business permit, forcing the company to conduct liquidation.

Steps for Company Closure Winding-up
Once the decision of closing down a company has been taken by the General Meeting of Shareholders (GMS), the procedure to do so involves a certain number of formal steps. To put it simply, the deregistration process is the registration process done in the reverse order. It should be noted that during the liquidation stage, each outgoing letter of the Company must bear the wording ‘in liquidation’ following the company name.

Step 1: Designation of a Liquidator
Step 2: Publication of the Dissolution
Step 3: Settlement of claims and accounts receivables
Step 4: General Meeting of Shareholders concerning Approval of Liquidator’s Duty and Effectiveness the liquidation of the Company
Step 5: Tax Deregistration and Deregistration within the MOLHR (Ministry of Law and Human Rights)

According to Article 152 of the Company Law, the liquidator must report to the MOLHR and announce the final outcome on the liquidation process in a newspaper at least 30 days from the date of the General Meeting of Shareholders approving the liquidator’s duties have been properly fulfilled. As a consequence, MOLHR will register and delete the Company’s name from the Company Registry and will announce it in State Gazette of the Republic of Indonesia.

Considering the different situations and different business structures, the processing time and service charges may vary. Tannet’s professional consultants and experienced associates will be glad to assist and advice on how to approach your particular challenge.

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