Company Partnership Agreement Template for Indonesia

A Company Partnership Agreement is a legally binding document that formalizes business collaborations between two or more entities in Indonesia. Under Indonesian law, this agreement serves as the foundation for joint ventures, strategic alliances, and other business partnerships while ensuring each party maintains its separate legal identity. The document must comply with the Indonesian Civil Code and Law No. 40 of 2007 on Limited Liability Companies, making it essential for establishing clear rights, obligations, and operational frameworks.

When do you need this document?

You need a Company Partnership Agreement when establishing any formal business collaboration in Indonesia. This includes situations where an Indonesian Limited Liability Company (PT) partners with foreign companies, when State-Owned Enterprises (BUMN) form alliances with private entities, or when professional services firms collaborate on projects. The agreement is also crucial for local business entities working with cooperatives (Koperasi), individual business owners forming joint ventures, and any scenario where multiple parties contribute capital, expertise, or resources to achieve shared business objectives while maintaining separate legal structures.

Key legal considerations

Your partnership agreement must address several critical legal elements to ensure enforceability and protection. Capital contribution clauses should specify each party's financial commitments, asset contributions, and ownership percentages. Management and control provisions must clearly define decision-making authority, board representation, and operational responsibilities. Profit and loss sharing arrangements require detailed specifications about distribution mechanisms and accounting procedures. The agreement should include comprehensive dispute resolution clauses, specifying arbitration or mediation procedures under Indonesian law. Exit strategies and termination provisions are equally important, outlining conditions for withdrawal, asset distribution, and partnership dissolution while protecting all parties' interests.

Legal requirements in Indonesia

Indonesian law imposes specific requirements on partnership agreements that you must carefully observe. Under Law No. 25 of 2007 on Investment, foreign partners must comply with investment regulations, including negative investment list restrictions and minimum capital requirements. The Indonesian Civil Code governs contract formation principles, requiring clear offer and acceptance, legal capacity of parties, and lawful objectives. Tax obligations under Law No. 7 of 1983 on Income Tax must be addressed, particularly regarding profit sharing and withholding tax responsibilities. If your partnership involves foreign entities, you must ensure compliance with foreign investment regulations and obtain necessary permits from the Investment Coordinating Board (BKPM). The agreement should be executed in Indonesian language or accompanied by certified translations, and proper notarization may be required depending on the partnership structure and involved parties.