The closure of a company in Indonesia may take place in either of two ways: through a decision made by the shareholders of the company or through enforcement. Those who are interested in finding out which authorities in Indonesia are allowed to forcibly close a company should read this FAQ.

Closure of an Indonesian Company

In certain circumstances, it is best for a company to be either temporarily or permanently closed. Such is the case for both Indonesian companies and companies based elsewhere. There are several reasons as to why a company could be closed. These range from financial troubles to the decision of shareholders of the company to the expiration of the company’s incorporation period. However, in certain instances, a company in Indonesia may be forcibly closed. This forced closure is conducted by various authorities. Some of these authorities act directly towards the company’s closure; others act indirectly. Despite this difference, all authorities involved play a role in the forced closure of an Indonesian company.

Role of the Court in an Indonesian Company’s Closure

The court plays the most direct role with regard to the forced closure of any company in Indonesia. This is due to the fact that court decisions and verdicts often have a direct impact on the company itself. The court authorities might choose to enforce the closure of a company in Indonesia due to a failure to comply with the country’s corporate laws. Such non-compliance may include the legal defect of the company’s deed of establishment as well as any attempt to operate a company which has not been active for three years or longer. The court may also require a company to be closed if the company has become bankrupt and the assets which are currently owned by the company are insufficient to cover all remaining debts which would thus allow the company to no longer be bankrupt.