Corporate Dissolution
Company dissolution is a legal process in which a company officially ends its operations and disappears as a legal entity. The process involves the settlement of all company liabilities, including the payment of debts, sale of assets, and distribution of remaining assets to shareholders. Dissolution can occur for various reasons, such as strategic decisions, financial issues, mergers, or acquisitions, and requires an orderly procedure in accordance with applicable legal regulations to ensure all rights and obligations of the company are properly settled.
BRIEF OVERVIEW
Company is considered dissolved once certain conditions or aspects are being fulfilled legally. Some of the conditions are as follow:
- Dissolved based on the resolutions of Shareholders – Article 142 (1) of Indonesian Company Law.
- Dissolved based on the Court Verdict (penetapan pengadilan) – Article 146 (1) of Indonesian Company Law.
- Dissolved due to the end of incorporation term. Within 30 days of the expiration of incorporation term, the Company is required to appoint a liquidator.
- Bankruptcy condition or bankruptcy assets in insolvent condition – Article 142 (1) e of Indonesian Company Law j.o Article 187 of Postponement of Debt Payment Obligations (PKPU) Law.
- Revocation of the business license – Article 142 (1) of Indonesian Company Law.
- Violation of the law and regulations
The legal and regulatory overview of a corporate dissolution is under Company Law of Indonesia No. 40 of 2007
Steps & Requirements:
(Based on the Company Law of Indonesia)
1. | Dissolution notification by the appointed liquidator through the national newspaper and State Gazette of the Republic of Indonesia |
2. | Registering dissolution to the Ministry of Law and Human Rights |
3. | Assets registration by the liquidator |
4. | Liquidation report submission to the Ministry of Law and Human Rights and the ratification of liquidation report |
5. | Final liquidation report submission to Shareholders Meeting or Court |
6. | Acknowledgement of the dissolved incorporation term by the Ministry of Law and Human Rights |
7. | Revocation request of any related business license |
8. | Revocation request to the registered Tax Office and resolve HR-related matters |
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