Dissolving a Commanditaire Vennootschap (CV) or Limited Partnership in Indonesia involves careful legal and administrative procedures. This guide presents practical steps and strategic recommendations for foreign investors and business owners seeking an efficient, secure, low-risk dissolution process.
Legal Framework for CV Dissolution
The process is governed by Regulation of the Minister of Law and Human Rights No. 17 of 2018 and Articles 30-35 of the Indonesian Commercial Code (KUHD).
Valid Reasons for Dissolution
- Expiration of the partnership agreement
- Achievement of the CV’s purpose
- Mutual agreement among partners
- Court decision
- Resignation or death of an active partner
- Other reasons established by law
After determining the reason for dissolution, the next step is preparing the necessary documentation.
Required Documents
- CV establishment deed and latest amendments
- Written approval from all partners
- Proof of tax obligation settlement
- Dissolution application letter
- Dissolution deed from a notary
- Court decision (if dissolution is through court)
Dissolution Procedure
1. Partner Approval
Obtain approval from all partners (active and passive) through a dissolution meeting. This approval forms the legal basis for subsequent steps.
2. Liquidator Appointment
The liquidator is responsible for ensuring the process runs smoothly, fairly, and in accordance with the law. Their task is to settle company obligations before distributing liquidation proceeds.
3. Notarized Dissolution Deed
CV dissolution must be formalized through an authentic notarial deed containing partner agreements, liquidator appointment, and planned distribution of liquidation proceeds.
4. SABU Registration
Submit a dissolution registration application to the Minister of Law and Human Rights through the Business Entity Administration System (SABU), attaching the dissolution deed and supporting documents.
5. Ministerial Decree Issuance
The Ministry of Law and Human Rights will issue a Decree confirming the legal dissolution of the CV. This decree serves as official evidence for subsequent processes.
6. Media Announcement
The dissolution must be announced in official media (newspaper or State Gazette) within 30 days after the dissolution decision. Parties with claims are given 60 days to settle their affairs.
7. Tax Settlement
Complete all tax obligations and apply for Tax Identification Number (NPWP) revocation at the Tax Service Office where the CV is registered.
After completing the administrative procedures, the next focus is the liquidation process, which is the financial settlement phase of CV dissolution.
Liquidation Process
Asset and Liability Settlement
During liquidation, all assets are inventoried and valued to settle obligations to third parties. Creditors are given 60 days after the announcement to submit claims.
Distribution of Remaining Assets
After settling obligations, remaining assets are distributed to partners according to the proportions agreed upon in the dissolution deed, with documentation and supervision by the liquidator.
Beyond procedural aspects, CV dissolution also has strategic dimensions that need to be considered by foreign entrepreneurs and investors.
Strategic Considerations
Properly executed dissolution provides benefits:
- Protecting personal assets from business obligations
- Preventing future legal issues
- Providing closure with tax authorities
- Allowing partners to transition to new ventures without ongoing obligations
To help you plan the dissolution process better, here is an estimated timeline to consider.
Estimated Timeline
- Partner approval: 1-2 weeks
- Notary process: 1 week
- SABU registration: 1-2 weeks
- Decree issuance: 2-4 weeks
- Announcement and claim period: 60 days
- Tax settlement: 2-4 weeks
To ensure no steps are missed in the dissolution process, use the following checklist as a practical guide.
CV Dissolution Checklist
- Approval from all partners
- Complete documentation
- Liquidator appointment
- Notarial deed
- SABU registration
- Ministerial Decree
- Media announcement
- Creditor claim settlement
- Tax obligation closure
- NPWP revocation
- Asset distribution
By following this checklist, you can ensure that the CV dissolution process runs smoothly and in accordance with Indonesian regulations.
Conclusion
Understanding the CV dissolution process is crucial for minimizing legal and financial risks for foreign investors operating in Indonesia. Proper procedures not only ensure regulatory compliance but also protect partners’ assets from potential future liabilities. CV dissolution has unique characteristics that differ from other business forms and requires an appropriate approach aligned with Indonesian business law.
Need Dissolution Solutions for Your CV in Indonesia?
Limited understanding of the CV dissolution process can create unnecessary legal complications and administrative burdens for your business in Indonesia. Contact us at info@lexara.id to discuss your CV dissolution strategy and receive guidance tailored to your business needs in the Indonesian legal context.
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