Company Dissolution and Liquidation Service

company liquidation

Written by Gio Saputra on 09/07/2024
The author’s views are entirely their own and may not always reflect the views of Putranto Alliance.

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Introduction

The decision to dissolve a Limited Liability Company (LLC) may be influced by various factors. Apart from financial challenges, reasons for dissolution might include the decision from shareholders, restructuring within a corporate group, or strategic exits from local markets. 

The process requires a thorough understanding of legal requirements and meticulous attention to detail. Our specialized Company Dissolution and Liquidation Service is designed to simplify this intricate procedure, ensuring a smooth and compliant dissolution process. With expert guidance and support, business owners can focus on their next ventures while we handle the complexities of the dissolution process.

Definition

Company dissolution is the formal process of legally terminating a business entity. This procedure involves a series of steps that must be followed to ensure compliance with local laws and regulation.

Company liquidation, as per Indonesian regulations governed by Law Number 40 Year 2007icon for new tab concerning Limited Liability Company, involves dissolving a company as a legal entity. This process encompasses settling obligations to creditors and distributing remaining assets to shareholders. Initiated when a company ceases operations, liquidation indicates a definitive decision not to resume business in the future.

The Importance

Engaging with a specialized Company Dissolution service is crucial for several reasons:

  1. Legal Compliance
    Ensuring that all legal requirements are met during the dissolution process is essential to avoid future penalties or legal issues.

  2. Time Efficiency
    The dissolution process can be lengthy and time-consuming, especially during the liquidation step. Utilizing a specialized service can significantly reduce the time required to complete the process.

  3. Risk Mitigation
    Professional assistance helps identify and mitigate risks associated with the dissolution, such as unresolved liabilities or compliance failures.

The Best Time to Engage

Identifying the optimal time to engage with a specialized Company Dissolution service is essential for a smooth dissolution process. The following scenarios indicate when it is advisable to seek assistance:

  1. Decision to Dissolve:
    As soon as the decision to dissolve the company is made at the General Meeting of Shareholders (Rapat Umum Pemegang Saham/RUPS), engaging with a professional service can help outline the necessary steps and requirements.

  2. During the Liquidation Process
    When evaluating the company’s assets and liabilities, professional guidance can clarify the best liquidation approach.

Benefits of Using Professional Service

Utilizing a specialized Company Dissolution service offers numerous advantages that can significantly enhance the dissolution process:

  1. Streamlined Process
    Expert services simplify the dissolution process by providing a clear roadmap, ensuring that all steps are followed efficiently.

  2. Comprehensive Documentation
    Professionals assist in preparing and managing the necessary documentation, reducing the risk of errors or omissions.

  3. Legal Expertise
    Access to legal knowledge ensures compliance with all relevant laws and regulations, minimizing the risk of future liabilities.

company liquidation

How to / The Process

Engaging with a specialized Company Dissolution service involves a systematic approach to ensure a smooth and compliant dissolution process. The following steps outline the typical process:

  1. Initial General Meeting of Shareholders (RUPS phase 1)
    The company holds an initial meeting to approve its dissolution and appoint a liquidator responsible for managing the liquidation process.

  2. Notification and Announcement
    Within 30 days after the RUPS, the appointed liquidator must:
    1. Notify creditors through announcements in newspapers and the Official Gazette (Berita Negara Republik Indonesia/BNRI), providing a 60-day claim period. The notification provides details about legal grounds, claim submission procedures, deadlines, and the liquidator's appointment.
    2. Inform the Ministry of Law and Human Rights to record the liquidation status.

  3. Claim Submission Period
    Creditors have 60 days to submit claims for debts owed by the company. The liquidator verifies and assesses these claims to determine their validity and prioritization in the debt repayment.

  4. Taxpayer Identification Cancellation
    Apply for the company’s Taxpayer Identification (Nomor Pokok Wajib Pajak/NPWP) cancellation. The process depends on how organized the company's operations are, including complete financial reports, updated licenses, and well-documented agreements. This step can run parallel to the 60-day announcement period but may take 6 months to 1 year to complete.

  5. Asset Liquidation
    The liquidator appraises company assets, often with the help of independent appraisers, and sells them to generate cash proceeds. Secured creditors are paid first, followed by unsecured creditors, based on the prioritization of claims.

  6. Creditor Payment
    The liquidator distributes proceeds from asset sales to creditors according to the established priority, ensuring all debts are settled in compliance with legal requirements.

  7. Surplus Distribution
    After creditors are fully compensated, any remaining surplus is returned to the company’s shareholders, ensuring fair treatment and value maximization for all parties involved.

  8. Second General Meeting of Shareholders (RUPS Phase 2)
    Shareholders review and approve the liquidator’s accountability report, which details the liquidation process and asset distribution. The liquidator is formally released from their duties and responsibilities following this approval.

  9. Final Announcements
    The liquidator publishes the liquidation results in newspapers and BNRI and notifies the Ministry of Law to officially record the completion of the process and remove the company’s name from the registry. This step finalizes the company’s dissolution status.

company liquidation

How We Can Help

Our specialized Company Dissolution and Liquidation Service provides comprehensive support throughout the company dissolution process. Here’s how assistance can be tailored to meet specific needs:

  1. Expert Consultation: Offering initial consultations to assess the unique circumstances of the company and provide tailored advice on the dissolution process.
  2. Document Preparation: Assisting in preparing all required documentation, ensuring compliance with legal standards, and reducing the risk of errors.
  3. Legal Representation: Providing legal representation during the dissolution process, including filing applications and handling communications with regulatory authorities.
  4. Liquidation Management: Overseeing the liquidation process, including asset evaluation, creditor negotiations, and settlement of liabilities.

FAQs

Creditors who have not submitted their claims within the specified period may still do so through the district court within two years of the announcement of the company’s dissolution. These claims can be made as long as there are remaining assets for shareholders during the liquidation process.
In cases where creditors submit claims within the designated period but are rejected by the liquidator, they have the option to file a lawsuit with the district court within 60 days from the date of rejection.

The company’s assets are liquidated to settle outstanding liabilities to the respective creditors. After all of the liabilities are resolved, any remaining funds are distributed to shareholders as per the legal requirements.Toggle Content

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