What to do if the company going bankrupt in Indonesia?

All the businessman must have hope to always maintain the business in order to survive, but not all businesses can run well and had to swallow the bitterness that is to be closed.

 
Now we give a review for foreign companies that almost or went bankrupt in Indonesia. There are several things you can do, some general advice and partly we review in a special review.


1.    Change Your Business

Many foreigners that came to Indonesia with a business plan that very nice and brilliant idea obtained from abroad, then with a very confident opened the company in Indonesia without doing market research. The downside of their innovations is not yet done in Indonesia before so the community is not interested in their products. If this last for long time can lead to bankruptcy. Our first suggestion is to change your line of business, for foreign companies (PMA)  in Indonesia you are allowed to change the line of business or adding the business into 2 (maximum). But before you do this, you should ask to BKPM (Investment Coordinating Board) for certainty is allowed or not, how many shares to the foreign shareholders, and whether there are additional requirements for this.


2.    The Financial Arrangements

Cut costs to a realistic level, there is cutting unnecessary costs and avoid large expenditures that do not provide added value for the company's development in the future. This can be done using the new budgeting system with clear accountability procedures that have never applied before. Many companies are problematic fell into hard times due to acquisitions and expansions that not considered carefully. So, in addition to cutting costs, companies that still need to improve some parts and systems.


3.    Acquisition 

Specifically, the acquisition is an action to take over a company by another company which is usually, but not always, achieved by buying shares of other companies. Unlike the merger, in the case of the acquisition of no company that merged into other companies. So, after the acquisition of the two companies still exist, only the ownership and control of the company being taken over has changed. Therefore, the acquisition can be interpreted as the support for the company to remain open and running.
 

4.    Liquidation

This is the last option, if the company cannot be sustained until no one wanted to acquisitions. According to Article 142 Paragraph (2) of Indonesia’s Law No. 40 of 2007 suggests that the Dissolution of the company shall be followed by liquidation conducted by a liquidator or curator; and the Company cannot perform a legal act, unless required to clean up all the affairs of the Company in the framework of liquidation. This means Dissolution of the Company is done by or liquidation proceedings conducted by the liquidator or because of bankruptcy by the curator to settle all matters lodged with the Company that is dissolved so as not to be a problem later on.

As for the dissolution happens by AGM / RUPS (General Meeting of Shareholders), the founding period stipulated in the Articles of Association has ended or the revocation of bankruptcy by the commercial court decision and the RUPS doesn’t appoint a liquidator, the Board of Directors act as liquidators. This is because that the Company Limited is an agreement, and then it can be dissolved with the agreement also taken in the RUPS. Here, acting as liquidator is the Board of Directors on an agreement with shareholders.



 

That's some advises and information from us about how to deal with the company that almost or went bankrupt. If you need licensing or consulting services regarding this matter, please contact us! The first meeting we provide for free.    Click Here!