- Home
- Business Expansion
- Company Dissolution in Indonesia
Company Dissolution in Indonesia
- Share:
Closing your Indonesian business requires following the official procedure when you cease operations.
The initial step in dissolving a company in Indonesia involves removing its legal entity status. Therefore, upon declaring dissolution, a company must legally cease all operations.
By having legal, tax and accounting experts from LMI Consultancy, we provide a one-stop service for company dissolution. We will ensure that all perspectives will be covered during the process for the benefit of clients so the company can be dissolved correctly and in an orderly way.
Type of Dissolution
- Voluntary Dissolution: Initiated by the shareholders through a General Meeting of Shareholders (GMS) decision. Reasons may include low profitability or strategic business changes.
- Involuntary Dissolution: Occurs against the will of the shareholders, often mandated by a court order. This can happen due to bankruptcy or failure to comply with legal requirements.
- Liquidation (Voluntary): A process where a solvent company decides to wind up its operations voluntarily. It involves appointing a liquidator to sell assets, settle debts, and distribute remaining assets to shareholders.
- Liquidation (Involuntary): Initiated when a company is declared bankrupt by a court. The court appoints a liquidator to manage the sale of assets and settlement of debts according to creditor claims.
- Dissolution by Revocation: Occurs when the government revokes the business license due to non-compliance with regulations or failure to operate for an extended period.
- Dissolution as per Articles: A company may dissolve itself according to stipulations outlined in its Articles of Association, which may include specific conditions for dissolution
How are assets distributed among creditors and shareholders during liquidation
During liquidation, the distribution of assets among creditors and shareholders follows a specific hierarchy based on the priority of their claims, just like the following list:
Secured Creditors
- Secured creditors: These creditors have claims backed by collateral. They are paid first from the proceeds of selling secured assets.
Preferential Creditors
- Employees, tax authorities, etc: This group includes employees owed wages and certain tax obligations. They are paid after secured creditors.
Unsecured Creditors
- Unsecured creditors: These creditors do not have collateral backing their claims and are paid next, often on a pro-rata basis if funds are insufficient.
Shareholders
- Preferred and common shareholders: Shareholders receive any remaining assets after all creditors have been paid. Preferred shareholders are paid before common shareholders.
Distribution Process
- Asset Liquidation: A liquidator is appointed to sell the company's assets to generate funds.
- Payment of Liquidation Costs: Before any distributions, costs related to the liquidation process (e.g., liquidator fees) are settled.
- Secured Creditors Paid First: Proceeds from the sale of secured assets are used to pay off secured creditors.
- Preferential Claims Settled Next: After secured creditors, preferential creditors receive their due payments.
- Unsecured Creditors Paid on Pro-Rata Basis: If there are remaining funds, unsecured creditors are compensated based on the proportion of their claims.
- Shareholder Distribution: Finally, if any assets remain after all debts have been settled, they are distributed among shareholders according to their share type (preferred or common).
Document Requirements
- ID card and NPWP of Director and Committees;
- Deed of the establishment until the last amendment;
- Decree of the Ministry of Law and Human Rights until the last amendment;
- Minutes of the GMS;
- Company Domicile Certificate (SKDP);
- NPWP, Trade Business Licence (SIUP), and TDP/NIB;
- Proof of monthly and annual tax reports of PT.
Dissolve Your Company in Indonesia with LMI Consultancy
- Consult your inquiry with our professional consultant
- Submit necessary document
- Proceed with the payment
- Application process
- Receive the complete document
Other Popular Company Registration Services in Indonesia
Setup a Business in Indonesia with LMI Consultancy
Established in 2016, LMI Consultancy has been supporting countless individuals in understanding the intricacies of visas, business setup, tax & accounting, and property investment in Indonesia, providing a comprehensive and dependable service.Â
We take pride in being an ethical and innovative company that places a strong emphasis on exceptional customer service and strives to set a new standard in our industry, guaranteeing a smooth and encouraging experience for our clients.
FAQ
What is the typical duration of the liquidation process for a PMA company?
It may take up to two years to complete the liquidation.
What responsibilities do investors have as shareholders in a company undergoing liquidation?
The shareholders’ responsibility is to appoint a liquidator to handle the liquidation at the general meeting where the liquidation is approved. Should no liquidator be appointed, the Board of Directors will serve in that capacity.
Who can be the liquidator of a company?
An appointed person or company, known as a liquidator, handles the liquidation process as determined by the General Meeting of Shareholders. Typically, the appointed liquidator is a company director, though an independent expert could also serve.
Disclaimer : Our services in LMI Consultancy provide consulting services focused on ensuring client compliance with applicable immigration and legal regulations in Indonesia. We do not provide or facilitate the production of official government documents, nor do we offer any expedited or preferential access to government services.
Contact Us
Discover How We Can Help You
Transform your ambitions into achievements. Contact LMI Consultancy today and take the first step towards your business or life expansion across Asia!
- Jakarta HQ Office
Get Your Free Consultation
Connect with our consultants for expert advice.
- Seminyak Bali Office
Get Your Free Consultation
Connect with our consultants for expert advice.
- Sanur Bali Office
Get Your Free Consultation
Connect with our consultants for expert advice.
News & Resources
Get to Know the Latest Business & Visa Updates
The Indonesian Government is reportedly planning to involve state-owned banks, private banks, fintech companies and e-commerce platforms in collecting taxes on digital transactions from 9 November 2026. The announcement followed remarks by Hashim Djojohadikusumo, the President’s Special Envoy for Climate and Energy, who outlined plans to expand digital tax collection at a forum last week. […]
LMI Consultancy
November 11, 2026
Having a baby in Indonesia as a foreign national involves more than arranging hospital and civil registration documents. Parents must also ensure that their newborn has the appropriate immigration status to remain legally in the country. A child’s citizenship and immigration status are separate matters. Being born in Indonesia does not automatically grant a child […]
LMI Consultancy
November 6, 2026
Applying for an Australian visa from Indonesia? Be cautious of unregistered agents, misleading promises and fraudulent visa services. For expatriates living in Indonesia, choosing a reliable visa consultant can help reduce the risks of application errors, financial losses and immigration complications. International travel often involves more than booking flights and accommodation. Visa requirements, supporting documents, […]
LMI Consultancy
November 4, 2026
Indonesia introduced the 2025 Standard Classification of Indonesian Business Fields (Klasifikasi Baku Lapangan Usaha Indonesia or KBLI 2025) to replace the previous KBLI 2020 framework. The update affects how business activities are classified and recorded in Indonesia’s business licensing system. For companies, including foreign-owned companies (PT PMA), understanding the types of KBLI conversion is important […]
LMI Consultancy
November 3, 2026
Planning a trip to Europe in 2026? Indonesian passport holders generally need a Schengen visa to visit most European destinations for tourism, business meetings, family visits and other short-term purposes. Although one visa can provide access to 29 Schengen countries, applicants must meet specific requirements concerning their travel purpose, finances, accommodation, insurance and intention to […]
LMI Consultancy
October 29, 2026
Indonesian passport holders have several options for visiting selected destinations in China without applying for a visa in advance. Under specific regional visa-free arrangements, eligible travellers may visit Hainan, Xishuangbanna and Guilin, or enter designated areas through qualifying organised cruise tours. These arrangements offer greater flexibility for Indonesian travellers planning holidays, short visits or other […]
LMI Consultancy
October 27, 2026
