The Contract For LLC Partnership serves as the foundational document for establishing and operating a Limited Liability Company partnership in Indonesia. This document is essential when two or more parties wish to form a business entity with limited liability protection while maintaining the flexibility of a partnership structure. It must comply with Indonesian Law No. 40 of 2007 on Limited Liability Companies, the Investment Law, and related regulations. The contract addresses crucial elements such as capital requirements, ownership structure, management arrangements, profit distribution, and partner obligations. It's particularly important for both domestic and foreign investors seeking to establish a formal business presence in Indonesia, providing the legal framework for corporate governance and partner relationships while ensuring regulatory compliance.
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1. Parties: Identifies all partners/members entering into the LLC partnership, including their full legal names, addresses, and registration numbers for corporate entities
2. Background: Sets out the context and purpose of the partnership, including the intended business activities and objectives
3. Definitions: Defines key terms used throughout the agreement to ensure clarity and prevent misinterpretation
4. Company Formation: Details of the LLC's establishment, including company name, registered address, and business objectives (as required by Indonesian Law No. 40 of 2007)
5. Capital Contributions: Specifies the initial capital contributions of each partner, form of contribution (cash/assets), and capital structure
6. Ownership and Shares: Details the distribution of ownership, classes of shares, and voting rights of each partner
7. Management Structure: Defines the management organization, including appointment of directors, commissioners, and key officers as per Indonesian company law
8. Decision Making: Outlines voting procedures, quorum requirements, and matters requiring partner approval
9. Rights and Obligations: Lists the rights and responsibilities of all partners, including participation in management and profit sharing
10. Profit and Loss Distribution: Details how profits and losses will be allocated among partners
11. Transfer of Shares: Procedures for transferring ownership interests, including right of first refusal and transfer restrictions
12. Dissolution and Liquidation: Procedures for dissolving the partnership and distributing assets
13. Governing Law: Confirms Indonesian law as governing law and relevant jurisdiction
14. Dispute Resolution: Specifies procedures for resolving disputes, including mediation and arbitration provisions
1. Non-Competition: Restricts partners from engaging in competing businesses - include when partners have other business interests
2. Intellectual Property Rights: Addresses ownership and use of IP - include when the business involves significant IP assets
3. Foreign Investment Provisions: Special provisions for foreign partners - include when there are foreign investors
4. Tag-Along and Drag-Along Rights: Special share transfer provisions - include for larger partnerships with sophisticated investors
5. Emergency Funding: Procedures for additional capital calls - include when business may require future capital injections
6. Employee Management: Guidelines for hiring and managing employees - include for larger operations
7. Environmental Compliance: Environmental obligations - include for businesses with environmental impact
1. Schedule A - Capital Contributions: Detailed breakdown of each partner's initial capital contributions, including valuation of non-cash assets
2. Schedule B - Share Certificate Specimens: Format and content of share certificates to be issued
3. Schedule C - Business Plan: Initial business plan and financial projections
4. Schedule D - Management Structure Chart: Organizational chart showing management hierarchy and reporting lines
5. Schedule E - Key Performance Indicators: Metrics for evaluating business and management performance
6. Appendix 1 - Company Licenses: Copies of all required business licenses and permits
7. Appendix 2 - Partner Information: Detailed information about each partner, including KYC documentation
8. Appendix 3 - Asset Register: List of company assets and their agreed valuations
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