Corporate Promissory Note Template for Indonesia

A Corporate Promissory Note is a legally binding financial instrument that establishes a formal promise by a corporation to pay a specific amount of money to a designated payee under predetermined terms. In Indonesia, this document must comply with the Indonesian Commercial Code (KUHD), particularly Articles 174-177 governing negotiable instruments, while adhering to corporate governance requirements under Law No. 40 of 2007 on Limited Liability Companies.

When do you need this document?

You need a Corporate Promissory Note when your company requires formal documentation of debt obligations in commercial transactions. This includes situations where your corporation is securing short-term financing from investors, documenting supplier credit arrangements, or establishing payment schedules for business acquisitions. The document is essential when banks or financial institutions require formal acknowledgment of corporate debt, or when structuring inter-company loans within corporate groups. Additionally, you'll need this note when regulatory compliance demands formal documentation of financial obligations, particularly for companies subject to Financial Services Authority (OJK) oversight under Regulation No. 42/POJK.03/2017.

Key legal considerations

The promissory note must contain an unconditional promise to pay, clearly stating the principal amount in both numerical and written form to prevent disputes. Interest rate provisions should comply with Indonesian usury laws and clearly specify calculation methods, payment frequency, and compounding terms. Corporate authorization clauses are crucial, requiring proper board resolutions and signatory authority documentation to ensure the note's validity. Default and acceleration clauses should align with Indonesian Civil Code (KUHPer) provisions on obligations, while enforcement mechanisms must consider Law No. 37 of 2004 on Bankruptcy procedures. The document should also include guarantor provisions if applicable, clearly defining corporate guarantee terms and personal liability limitations.

Legal requirements in Indonesia

Indonesian law requires Corporate Promissory Notes to include specific mandatory elements for legal enforceability. The document must identify the issuing corporation with complete legal name, registration number, and registered address as required by company law. Payment terms must specify the exact maturity date, currency (Rupiah or foreign currency with proper authorization), and designated payment location within Indonesian jurisdiction. Corporate signatory authority must be properly documented through board resolutions and company articles of association, ensuring authorized officers have legal capacity to bind the corporation. For notes exceeding certain thresholds, notarization may be required under Indonesian Commercial Code provisions. Additionally, foreign currency denominated notes may require approval from Bank Indonesia, while companies in regulated sectors must ensure compliance with sector-specific OJK regulations governing corporate debt instruments.