THREE KEY ROLES OF LAWYER IN CORPORATE LIQUIDATION
Naturally, business contains risk, either positive or negative. It would be positive risk if the company gains a lot of benefits. In contrary, it would be negative risk if the company goes bankrupt so that the company must be liquidated. Related to company liquidation process, there are 3 (three) key roles of lawyer that you must to know.
The definition of liquidation is “a company dissolution process that includes the payment of debts to the creditors and assets distribution to the shareholders”. Referring to Law number 40 of 2007 regarding Limited Liability Company, liquidation is an obligatory follow up action after the company dissolution which is conducted by liquidator or curator.
In detail, the dissolution of a company shall be occurred:
- Based on the decision of General Meeting of Shareholders (GMS);
- Due to the company’s duration as stipulated in the article of association has elapsed;
- Based on court order;
- Due to revocation of insolvency statement based on the commercial court’s decision that has final legal binding force, insolvent properties is not sufficient to pay the insolvent process;
- Due to insolvent properties of a company that has been insolvent are under insolvency as stipulated in Law regarding Insolvency and Suspension of Debt Payments;
- Due to revocation of business license, so that the company is obliged to conduct liquidation in accordance with the prevailing regulation.
The liquidator who acts for and on behalf the company is appointed by the General Meeting of Shareholders (GMS). The appointment of liquidator must be conducted by the GMS within 30 days, in the case of company dissolution due the company’s duration as stipulated in the article of association has elapsed. If GMS has not appointed a liquidator, the director may act as liquidator.
Lawyer can take part in company liquidation process in three roles.
First, lawyer can be appointed as the liquidator. In certain condition, GMS prefers to choose lawyer rather than director as the liquidator, because of there are so many legal aspects related to liquidation process. Therefore, GMS needs someone who is expert in legal matters to deal with liquidation process.
Second, GMS appoints the director as liquidator, but at the same time, company also hires a lawyer to assist the director. The consideration to hire lawyer is mostly similar to the first role as explained before. In this role, lawyer acts as a legal consultant who makes sure that the liquidation process is conducted in accordance with prevailing laws.
In the first role situation, lawyer may act for and on behalf of the company which is in the liquidation process. Meanwhile, in the second role situation, lawyer’s act is limited based on the detail of power attorney or legal service agreement. Lawyer may not act for and on behalf of the company.
Third, lawyer may play role as the curator. Referring to Law regarding Limited Liability Company, curator is needed when the company is dissolved due to insolvent properties of a company that has been insolvent are under insolvency as stipulated in Law regarding Insolvency and Suspension of Debt Payments.
Based on the Regulation of Minister of Law and Human Rights Number 18 of 2013 regarding Requirement and Registration Mechanism of Curator and Administrator, there are some requirements to become a curator. One of the requirements is advocate, public accountant, bachelor of law, or bachelor of economy. To be specific, the Regulation states a bachelor of law must work at least three years at law firm before register to become a curator.
In the liquidation process, the duties of lawyer as the curator are responsible to the supervising judge on liquidation of a company performed; inform the Minister and announce the final result of liquidation in newspaper as from GMS provides settlement and dispensation to a liquidator or as from the court accepts responsibility of a liquidator appointed.
BP Lawyers can help you
We have extensive experience in handling liquidation in Indonesia. For further information and consultation related to liquidation, contact us now at E: firstname.lastname@example.org or phone: H: +62821-1234-1235