Document background
The Buy Sell Agreement (Cross Purchase) is a critical document for Indonesian private companies with multiple shareholders, designed to provide a clear framework for share transfers between shareholders. This agreement becomes particularly important when certain trigger events occur, such as death, disability, retirement, or voluntary departure of a shareholder. The cross-purchase structure means that remaining shareholders, rather than the company, are obligated to purchase the departing shareholder's interests. The agreement must comply with Indonesian corporate law, particularly Law No. 40 of 2007 on Limited Liability Companies, and typically includes detailed provisions for share valuation, payment terms, funding mechanisms (often through insurance), and transfer procedures. It serves as a crucial tool for business continuity planning, preventing unwanted third-party ownership, and maintaining harmonious shareholder relations.
