Equity Agreement Template for Indonesia

Consider implementing an Equity Agreement when bringing new investors into your Indonesian company or restructuring ownership among existing shareholders. This becomes especially important during funding rounds, joint ventures, or when expanding your business through strategic partnerships under Indonesia's Investment Law.

The agreement proves essential when setting up employee stock ownership programs (ESOP), planning for future exits, or protecting minority shareholder rights. Companies entering Indonesia's emerging markets often use these agreements to clarify governance structures, profit-sharing mechanisms, and dispute resolution procedures before complex situations arise.

• Equity Loan Agreement: Used when shareholders provide financing to the company in exchange for future equity rights, common in startup funding.
• Equity Transfer Agreement: Governs the sale or transfer of shares between parties, including terms of payment and ownership transition.
• Private Equity Subscription Agreement: Details terms for new investors purchasing company shares, including investment amount and shareholder rights.
• Limited Partnership Agreement Private Equity: Structures investment vehicles where limited partners provide capital while general partners manage investments.

• Company Founders: Initiate and structure equity distributions, often using these agreements when establishing ownership stakes or bringing in new partners.
• Investors: Both institutional and individual investors rely on these agreements to secure their rights, voting powers, and profit-sharing terms.
• Corporate Legal Teams: Draft and review agreements to ensure compliance with Indonesian investment laws and OJK regulations.
• Board Members: Approve and oversee equity arrangements, particularly during major ownership changes or capital raises.
• Financial Advisors: Help structure deals and ensure agreements align with valuation and investment strategies.

• Company Details: Gather complete corporate information, shareholder registry, and current capitalization table.
• Ownership Structure: Document proposed equity distribution, voting rights, and any special share classes.
• Investment Terms: Define valuation, investment amounts, and payment schedules following Indonesian investment regulations.
• Governance Rules: Outline board composition, decision-making processes, and shareholder meeting requirements.
• Exit Provisions: Specify transfer restrictions, tag-along rights, and dispute resolution mechanisms.
• Documentation: Use our platform to generate a customized, legally-compliant agreement that includes all required elements under Indonesian law.

• Parties & Identification: Complete details of all shareholders, company registration numbers, and tax IDs per OJK requirements.
• Share Details: Precise description of share classes, quantities, par values, and rights attached.
• Consideration Terms: Clear payment terms, valuation methods, and transfer procedures.
• Governance Provisions: Board composition, voting thresholds, and meeting procedures under Company Law No. 40/2007.
• Transfer Restrictions: Right of first refusal, tag-along rights, and pre-emptive rights clauses.
• Dispute Resolution: Choice of Indonesian law, jurisdiction, and arbitration procedures.

While both documents deal with company ownership, an Equity Agreement differs significantly from a Simple Agreement for Future Equity (SAFE) in several key aspects under Indonesian law.

• Timing of Rights: Equity Agreements grant immediate ownership rights, while SAFEs promise future equity upon specific trigger events like funding rounds.
• Valuation Requirements: Equity Agreements need a defined company valuation at signing, whereas SAFEs delay valuation until conversion events.
• Legal Complexity: Equity Agreements contain detailed governance provisions and shareholder rights, while SAFEs are intentionally simpler instruments focused on future conversion terms.
• Regulatory Oversight: Equity Agreements face stricter OJK scrutiny and reporting requirements compared to SAFEs, which operate with more flexibility under Indonesian investment laws.