Entity Buy Sell Agreement Template for Indonesia

The Entity Buy Sell Agreement is a crucial document used in Indonesian business transactions when one entity intends to acquire another entity through either a share purchase or asset purchase mechanism. This agreement is essential for transactions governed by Indonesian law and must comply with Law No. 40 of 2007 on Limited Liability Companies, along with other relevant regulations such as investment laws, competition laws, and tax provisions. The document serves as the primary transaction document that outlines all material terms of the sale, including purchase price, payment mechanisms, warranties, indemnities, and closing conditions. It is particularly important in the Indonesian context due to specific regulatory requirements, foreign investment restrictions, and mandatory government approvals that may be required. The agreement should be structured to account for local business practices while incorporating international standard provisions for such transactions.

1. Parties: Identification of the buyer, seller, and any guarantors, including complete legal entity details as required under Indonesian law

2. Background: Context of the transaction, description of the business entity being sold, and purpose of the agreement

3. Definitions: Comprehensive definitions of terms used throughout the agreement, including Indonesian legal terms where applicable

4. Sale and Purchase: Core transaction terms including the subject matter of sale (shares/assets), purchase price, and completion mechanics

5. Purchase Price and Payment: Detailed payment terms, currency, payment method, and any adjustments to the purchase price

6. Conditions Precedent: Prerequisites to completion, including regulatory approvals, third-party consents, and other requirements under Indonesian law

7. Completion: Specifics of the closing process, including timing, location, and deliverables

8. Seller's Warranties: Comprehensive warranties about the business, its assets, liabilities, and compliance with Indonesian laws

9. Buyer's Warranties: Warranties from the buyer regarding authority, capacity, and funding

10. Pre-Completion Obligations: Obligations of both parties between signing and completion, including business conduct requirements

11. Post-Completion Obligations: Continuing obligations after completion, including transitional arrangements

12. Indemnification: Indemnity provisions for breach of warranties, tax matters, and specific identified risks

13. Confidentiality: Provisions regarding confidential information and announcements

14. Tax Matters: Allocation of tax liabilities and obligations, including Indonesian tax compliance requirements

15. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

16. General Provisions: Standard boilerplate clauses adapted to Indonesian law requirements