Company Agreement Template for Indonesia

When establishing a business entity in Indonesia, you need a comprehensive Company Agreement that complies with Indonesian corporate law. This foundational document serves as your company's constitutional framework, defining everything from ownership structure to governance procedures under Law No. 40 of 2007 on Limited Liability Companies.

When do you need this document?

You require a Company Agreement when forming a new PT (Perseroan Terbatas) in Indonesia, restructuring an existing company's ownership or governance structure, or when foreign investors join your Indonesian business entity. This document is mandatory for company registration with the Ministry of Law and Human Rights and essential for obtaining business licenses through the Online Single Submission (OSS) system. You'll also need it when establishing joint ventures, converting from other business structures to a limited liability company, or when significant changes occur in shareholding arrangements that require formal documentation.

Key legal considerations

Your Company Agreement must include mandatory provisions under Indonesian law, including detailed capital structure specifications, shareholder rights and obligations, board composition requirements, and clear decision-making procedures. Pay careful attention to share transfer restrictions, dividend distribution policies, and dispute resolution mechanisms. The document must address management structures for both the Board of Directors and Board of Commissioners as required by Indonesian corporate governance standards. Consider including protective clauses for minority shareholders, clear exit strategies, and compliance provisions for ongoing regulatory requirements. Employment-related provisions must align with Law No. 13 of 2003 on Manpower, while investment terms must comply with Law No. 25 of 2007 on Investment.

Legal requirements in Indonesia

Under Indonesian law, your Company Agreement must be drafted in Bahasa Indonesia and executed before a notary public to ensure legal validity. The document must comply with Government Regulation No. 43 of 2011 regarding company data filing procedures and meet specific formatting requirements for registration purposes. Foreign investment provisions must align with Indonesia's negative investment list and sectoral regulations. The agreement requires approval from the Ministry of Law and Human Rights and must be registered within 60 days of execution. Ensure compliance with minimum capital requirements, which vary by business sector, and include proper identification of all parties as mandated by Indonesian corporate law. The document must also address tax obligations under Indonesian tax law and include provisions for annual reporting requirements to maintain good corporate standing.