Managing the Closure of a Company, That Is Not Worthy of Continuing

Corporate Secretary Service Indonesia – Business is indeed an activity that does not always generate profits but also has the potential to cause losses. The business may eventually go bankrupt when the losses occur over a long period. If this happens, the business owner will take the final step, namely managing the Closing of Company, because it can no longer be continued.

Talking about company closures (lock-outs), the Limited Liability Company Law explains that this is a fundamental right of every entrepreneur. It’s just that lock-outs are not justified if entrepreneurs carry them out as a retaliatory action for normative demands from workers.

Likewise, companies that serve the public interest, such as hospitals, clean water network services, telecommunications control centres, electricity providers, and oil and gas processing to trains, are not allowed to carry out lock-outs. So, what are the characteristics and stages of closing a company other than those excluded above that can be done? Continue reading this article review until the end.

Stages of Closing a Company That Can No Longer Be Continued

In the business world, Closing of Company are related to dissolving a company as a legal entity or liquidation. You must pay creditors and distribute assets to shareholders in this liquidation process. In Indonesia, closing a company is the same as establishing a company that must go through several legal processes. This is regulated in Law of PT (Limited Liability Company) Number 40 of 2007, section 142, concerning termination of activities and liquidation until the end of the company’s status as a legal entity.

Reasons Why a Company Must Be Closed

If you thinks a company must be closed because its business fails, then that is not entirely correct. This dissolution occurs in companies that can no longer be continued when resources are reduced, poor management, and economic conditions worsen. Here are some reasons that make entrepreneurs dissolve their businesses:

• There is a decision to dissolve the GMS (General Meeting of Shareholders) through a joint consensus attended by at least ¾ of the shareholders
• The term of establishment, according to the provisions in the articles of association, has ended
• There is a revocation of the business license
• A court decision because the company is unable to comply with legal regulations, including problematic deed of establishment to business operations that have stopped for three years
• A court decision stating that the company is bankrupt and unable to pay bankruptcy costs
• There is a revocation of the PT PMA (Foreign Investment) license, which has carried out liquidation.

Read Also: 6 Benefits of Business Licenses for Business

Steps for Closing a Company

After a number of the reasons above are found in a company, the business owner can immediately begin the lock-out process. In this liquidation phase, there will be a liquidator from the board of directors, professionals or expert consultants responsible for paying debts to creditors. The liquidator himself is selected through court approval or the GMS and then carries out the following stages:

• Announcing the dissolution of the company through newspapers and the State Gazette of the Republic of Indonesia containing information on the dissolution of the PT and the legal basis, the name of the liquidator, address and procedures and period for submitting bills
• Registering the dissolution with the Ministry of Law and Human Rights within a maximum of 30 days after the lock-out is effectively implemented
• Registering several company assets and settlement obligations to creditors
• Reporting the final results of the liquidation to the GMS or court so that it can be ratified
• Ratifying the liquidation report to the Ministry of Law and Human Rights, which is then followed by the issuance of an announcement in the news media within a maximum of 30 days
• Recording the end of the legal status and deletion of the company name by the Ministry of Law and Human Rights

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