Pre Incorporation Founders Agreement Template for Indonesia

A Pre Incorporation Founders Agreement is an essential legal document you need when planning to establish a business with co-founders in Indonesia. This contract creates binding obligations between founding members before your company is formally incorporated under Indonesian law, protecting your interests and establishing clear expectations during the critical pre-incorporation phase.

When do you need this document?

You need this agreement when multiple individuals are planning to start a business together in Indonesia but haven't yet completed the formal incorporation process. This is particularly important if you're developing intellectual property, making initial capital contributions, or establishing roles before incorporation. Technology startups often require this document to protect proprietary information and define equity distribution. You'll also need it when foreign investors are involved, as Indonesian investment laws require clear documentation of ownership structures. The agreement becomes crucial if founding members will be working full-time on the venture before incorporation or if significant pre-launch investments are being made.

Key legal considerations

Your agreement must clearly define each founder's capital contributions, whether monetary, intellectual property, or services, as these will determine future equity distribution. Intellectual property clauses are critical - you need to specify whether existing IP belongs to individuals or will be assigned to the future company. Include comprehensive confidentiality provisions to protect sensitive business information and trade secrets. Establish clear roles and responsibilities for each founder, including decision-making authority and time commitments. Consider including vesting schedules for equity to protect against founders leaving early. Dispute resolution mechanisms are essential, specifying whether conflicts will be resolved through arbitration or Indonesian courts. Include termination clauses that address what happens if a founder withdraws before incorporation, including IP ownership and non-compete restrictions.

Legal requirements in Indonesia

Under Indonesian Civil Code (KUHPerdata), your agreement must meet basic contract requirements including legal capacity of parties, lawful object, and proper consideration. The document must comply with Law No. 40 of 2007 on Limited Liability Companies regarding pre-incorporation arrangements and founder obligations. If your venture involves foreign investment, ensure compliance with Law No. 25 of 2007 on Investment, including capital requirements and sector restrictions. Government Regulation No. 29 of 2016 sets minimum capital requirements that may affect your contribution structures. Employment law provisions under Law No. 13 of 2003 become relevant if founders will receive salaries or benefits before incorporation. Consider having the agreement prepared in both Indonesian and English languages, with Indonesian as the governing version for legal purposes. The document should be properly executed with witnesses and may require notarization depending on the value of contributions and complexity of arrangements.