Founders Contract Template for Indonesia

The Founders Contract is a vital legal document used when establishing a new company or formalizing an existing business relationship between founders in Indonesia. It serves as the primary agreement governing the founders' relationship and their commitments to the business venture. This document is essential when two or more individuals or entities come together to start a business, requiring clear documentation of their rights, responsibilities, and ownership stakes. The contract must comply with Indonesian law, particularly Law No. 40 of 2007 on Limited Liability Companies and related regulations. It typically includes provisions for equity distribution, vesting schedules, intellectual property rights, decision-making processes, and exit mechanisms. The agreement should be drafted in both Indonesian and English languages to comply with Law No. 24 of 2009, and must be executed before an Indonesian notary to ensure legal validity.

1. Parties: Identification of all founding members and their contact details

2. Background: Context of the agreement, including the business concept and purpose of the collaboration

3. Definitions: Key terms used throughout the agreement

4. Company Formation: Details about the company structure, registration, and initial capitalization

5. Equity Structure: Distribution of shares among founders, including initial allocation and vesting schedules

6. Capital Contributions: Details of what each founder will contribute (money, assets, or services)

7. Roles and Responsibilities: Defined roles, commitments, and expectations for each founder

8. Intellectual Property: Assignment of IP rights to the company and protection of company IP

9. Decision Making: Voting rights and process for major business decisions

10. Board Structure: Composition of the board and appointment rights

11. Transfer Restrictions: Limitations on share transfers and right of first refusal

12. Confidentiality: Protection of company and founder confidential information

13. Non-Compete and Non-Solicitation: Restrictions on competing activities and hiring company employees

14. Termination: Circumstances and process for terminating founder relationships

15. Dispute Resolution: Process for resolving conflicts between founders

16. Governing Law: Specification of Indonesian law as governing law and jurisdiction