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Tuesday, October 20, 2015

Small Claim Court in Indonesia

Small Claim Court in Indonesia
The Supreme Court of Indonesia, by virtue of Supreme Court Regulation No. 2 of 2015 (“PERMA 2-2015”), has regulated the procedure for Small Claim Court proceeding in Indonesia.

Under Perma 2-2015, Small Claim Court means a simplified civil case legal proceeding in which the maximum claim is Rp. 200,000,000.00 (two hundred million Rupiah).

The main criteria or procedure for filing a small claim in Indonesia, under Perma 2-2015 are as follows:
  1. The maximum claim is Rp. 200,000,000.00 (two hundred million Rupiah) regarding breach of contract or tort lawsuit.
  2. The Small Claim Court proceeding is presided over by single judge.
  3. The small claim shall be examined and ruled under jurisdiction of a District Court.
  4. The following disputes cannot be resolved in Small Claim Court: Disputes which must be resolved by a special court (i.e. labor dispute which must be resolved through Industrial Relation Court); and Land disputes.
  5. There must be one plaintiff and one defendant only, unless having the same legal interests.
  6. The plaintiff and defendant must be domiciled in the same District Court jurisdiction.
  7. The address of the defendant must be known.
  8. It is mandatory for the plaintiff and defendant to appear before the court in every stage of the proceeding, with or without their respective lawyer.
  9. The Small Claim Court Ruling must be resolved within 25 working days from the first court date.
  10. The judge must prioritize amicable settlement.
  11. There will be no provisional claim, exception, counter-claim, intervention, replik, duplik nor conclusion. The plaintiff may only lodge the lawsuit memorandum (Gugatan) and the defendant may only lodge the rebuttal (Jawaban). 
  12. The plaintiff must also submit legalized document evidence when the plaintiff submits the lawsuit memorandum (Gugatan).
  13. The evidentiary court session is in accordance with the civil case legal procedure.
  14. Either plaintiff or defendant may file an objection against the court ruling within 7 working days from the date of the court ruling or the date when the court ruling has been properly submitted to the respective party. This objection should be filed to the Chairman of the District Court.
  15. The legal proceeding of the objection is presided over by panel of judges appointed by the Chairman of the District Court.
  16. The Chairman of the District Court must appoint the panel of judges for the objection proceeding within 1 working day from the date when the objection application has been deemed complete.
  17. The panel of judges must resolve the objection proceeding within 7 working days.
  18. The objection judgment is final and binding.

Sunday, January 5, 2014

How to Dissolve a Company in Indonesia

Company Liquidation
In Indonesia, a liquidation of an Indonesian company by virtue of Article 142, paragraph 1 of the Indonesian Law No. 40 of 2007 on Limited Liability Company (“Company Law”), could performed by the following reasons:
  1. Based on a resolution of the General Meeting of Shareholders (“GMS”);
  2. Due to the expiry of the company, as prescribed in the articles of association;
  3. A court order;
  4. Revoked bankruptcy statement based on binding court judgment, and the asset of the company is not sufficient to pay the bankruptcy cost; or
  5. Due to the revocation of the company’s business permit, so that the company is obliged to conduct liquidation according to prevailing regulations.
The simplest method to dissolve the company is by virtue of resolution of the GMS that meets the minimum quorum requirement.

The shareholders of the company can undertake the GMS on the closure of the company after 7 working days written notice to employees and the local government agency responsible for manpower affairs. This obligation is regulated in Article 148 of Law Number 13 of 2003 concerning Manpower.

Article 144 of the Indonesian Company Law stipulates that the General Meeting of Shareholder concerning closure of company can be held based on the proposal from the Board of Directors, Board of Commissioners or 1 (one) or more shareholder representing at least 1/10 (one-tenth) from the total number of shares with voting right. Moreover, the quorum of the GMS on the closure of the company shall be valid if it is taken by mutual consensus or if it is approved by at least 3/4 (three-fourth) of the total shares issued with voting rights are present or represented, except the company’s articles of association stipulates a higher quorum.

The GMS Resolution should also appoint a liquidator for the company liquidation process. If the GMS Resolution does not appoint a liquidator therefore the directors automatically become the liquidator for the company liquidation process.

The liquidator shall be responsible to proceed and administer all necessary legal procedure in regards with the company liquidation, as follows:

- Within the latest period of 30 days as of the company’s dissolution, the liquidator shall be obliged to notify the following persons:

a. All creditors regarding the company’s dissolution, by way of announcing the company’s dissolution in a newspaper and in the State Gazette of the Republic of Indonesia; and
b. The Minister of Law and Human Rights of Republic of Indonesia, about the company’s dissolution that is to be registered in the Company Registry and states that the company is in liquidation (Article 147, paragraph 1 of the Company Law).

- The liquidator’s obligations in the settlement of a company’s assets in the liquidation process shall cover the following:

a. Recording and collecting the assets and debts of the company;
b. Publishing the plan for distribution of assets from the liquidation in the newspaper and the State Gazette of the Republic of Indonesia;
c. Making payment to creditors;
d. Making payment from the remaining liquidation assets to the shareholders; and
e. Other acts required for the settlement of the assets.

- The liquidator shall be obliged to notify the Minister and announce the final result of the liquidation process in a newspaper. This is conducted after the liquidator completes the payment of the remaining assets to all shareholders, and the GMS Resolution gives full acquittal and discharges to the liquidator.

The timeline estimation of the dissolution process will take at least 9 to 12 months from the date of the GMS Resolution.

By: tnrlawfirm

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