Deed Of Sale Of Shares Template for Indonesia

A Deed of Sale of Shares is a legally binding document that formalizes the transfer of company shares between parties in Indonesia. Under Indonesian corporate law, this deed must be executed before a licensed notary public to ensure legal validity and compliance with regulatory requirements. The document serves as conclusive proof of share ownership transfer and is essential for maintaining accurate corporate records with relevant authorities.

When do you need this document?

You need a Deed of Sale of Shares whenever you are buying or selling shares in an Indonesian limited liability company (PT). This includes situations where existing shareholders are exiting the business, new investors are joining the company, or when restructuring ownership arrangements. The deed is also required for estate planning purposes when transferring shares to family members, during mergers and acquisitions involving share exchanges, and when foreign investors are acquiring stakes in Indonesian companies subject to investment restrictions. Additionally, you may need this document when transferring shares as part of debt settlements or corporate reorganizations.

Key legal considerations

Several critical legal elements must be addressed in your deed. The document must clearly identify all parties with complete legal names, addresses, and identification numbers as required by Indonesian law. You must provide detailed descriptions of the shares being transferred, including quantity, class, and nominal value, along with comprehensive payment terms and completion conditions. Warranties and representations from both buyer and seller are essential to protect against future disputes and ensure the shares are free from encumbrances. The deed should also address any existing shareholder agreements, rights of first refusal, and compliance with the company's articles of association. Special attention must be paid to foreign ownership restrictions if international investors are involved, as certain business sectors have specific limitations under Indonesian investment law.

Legal requirements in Indonesia

Indonesian law imposes strict requirements for share transfer deeds that you must follow. Under Law No. 40 of 2007 on Limited Liability Companies, the deed must be executed before an Indonesian notary public and registered with the company's share register. The transaction must comply with minimum paid-up capital requirements under Government Regulation No. 29 of 2016 and obtain necessary approvals from regulatory bodies if foreign investment is involved. You must also ensure compliance with Law No. 25 of 2007 on Investment regarding foreign ownership restrictions in specific business sectors. The deed must be prepared in Indonesian language, and all foreign documents require official translation and legalization. Additionally, certain transactions may require approval from the Indonesian Investment Coordinating Board (BKPM) or other sector-specific regulators, depending on the nature of the business and the parties involved.