Definition of Liquidation according to Barron’s Dictionary of Business Terms is procedure in which shareholders surrender all of their shares in a corporation and receive, after all creditors are paid, their pro rata share of any remaining assets and accumulated earnings and profits.
Based on Law No. 40 of 2007 on Limited Liability Company (Company Law) Article 142, Company liquidation process in Indonesia can only proceed because of these following reasons :
In liquidation process is carried out by the liquidator or receiver.
During the liquidation process, the Company in Indonesia will not allowed to conduct any legal action, except if it is required to settle all the Company’s business limitedly only for the purpose of liquidation process.
After the liquidation steps has been completed, The Minister of Law and Human Rights will announce the termination of the Company’s status as legal entity in the State Gazette of the Republic of Indonesia
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