Company Separation Agreement Template for Indonesia

The Company Separation Agreement is a vital legal instrument used in Indonesian business restructuring scenarios where two or more business entities need to formally separate their operations, assets, and obligations. This document becomes necessary during corporate reorganizations, divestments, demergers, or the dissolution of joint ventures. It must comply with Indonesian corporate and labor laws, particularly Law No. 40 of 2007 on Limited Liability Companies and Law No. 13 of 2003 on Manpower. The agreement comprehensively addresses all aspects of the separation, including asset division, employee matters, intellectual property rights, financial settlements, and ongoing obligations between parties. It serves as both a roadmap for implementing the separation and a legally binding document that protects all parties' interests while ensuring regulatory compliance.

1. Parties: Identification of the separating entities, including full legal names, registration numbers, and authorized representatives

2. Background: Context of the separation, including history of the business relationship and reasons for separation

3. Definitions: Key terms used throughout the agreement, ensuring clear interpretation under Indonesian law

4. Effective Date and Timeline: Specific dates for the separation process, including key milestones and completion date

5. Asset Division: Detailed allocation of company assets, including physical assets, contracts, and financial accounts

6. Employee Matters: Treatment of employees, including transfers, redundancies, and associated benefits in accordance with Indonesian labor law

7. Intellectual Property Rights: Division and future usage rights of intellectual property, including trademarks, patents, and trade secrets

8. Financial Settlement: Financial terms of the separation, including any payments, debt allocation, and tax considerations

9. Confidentiality: Obligations regarding confidential information and trade secrets post-separation

10. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee/customer solicitation

11. Representations and Warranties: Statements of fact and guarantees by each party

12. Indemnification: Mutual protection against claims and liabilities

13. Dispute Resolution: Process for resolving disputes, including jurisdiction and governing law provisions

14. General Provisions: Standard clauses including notices, amendments, and severability