Purchase Of Shares Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that documents the terms and conditions for the purchase and sale of shares in a company. The agreement details the purchase price, payment terms, warranties, representations, conditions precedent, and completion mechanics, while ensuring compliance with Indonesian Company Law (Law No. 40 of 2007) and other relevant regulations. It includes provisions for due diligence findings, seller warranties, indemnities, and specific requirements for share transfers under Indonesian jurisdiction, including necessary corporate and regulatory approvals.

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What is a Purchase Of Shares Agreement?

The Purchase Of Shares Agreement is a critical document used in corporate acquisitions and investments in Indonesia, facilitating the legal transfer of company ownership through share sales. It must comply with Indonesian Company Law (Law No. 40 of 2007), Capital Investment Law (Law No. 25 of 2007), and relevant OJK regulations for public companies. The agreement is essential when acquiring partial or full ownership of Indonesian companies, whether in private transactions or regulated industries. It includes comprehensive provisions covering purchase price, payment terms, conditions precedent, warranties, representations, and indemnities, while addressing specific Indonesian regulatory requirements such as foreign ownership restrictions, mandatory language requirements, and notarization procedures. The document serves as the primary transaction document in share acquisitions, protecting both buyers' and sellers' interests while ensuring regulatory compliance.

What sections should be included in a Purchase Of Shares Agreement?

1. Parties: Identification of the seller(s), purchaser(s) and any guarantors

2. Background: Context of the transaction, including brief description of the company and purpose of the agreement

3. Definitions and Interpretation: Defined terms used throughout the agreement and rules of interpretation

4. Sale and Purchase: Core transaction terms including shares being sold and purchase price

5. Purchase Price and Payment: Detailed payment terms, timing, and payment mechanics

6. Conditions Precedent: Prerequisites that must be satisfied before completion can occur

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

8. Completion: Mechanics of closing, including timing, location, and actions required

9. Warranties: Seller's representations and warranties about the shares and the company

10. Limitations on Liability: Limitations on warranty claims and general liability caps

11. Indemnities: Specific indemnities provided by the seller

12. Confidentiality: Obligations regarding transaction confidentiality and company information

13. Announcements: Requirements for public announcements about the transaction

14. Further Assurance: Obligations to take further actions needed to give effect to the agreement

15. Notices: Process and requirements for formal notices under the agreement

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

17. General Provisions: Standard boilerplate provisions including assignment, amendments, and severability

What sections are optional to include in a Purchase Of Shares Agreement?

1. Price Adjustment: Mechanisms for post-completion price adjustments based on completion accounts or other metrics

2. Earn-out Provisions: Details of any performance-based additional payments

3. Non-Competition and Non-Solicitation: Restrictions on seller's future activities, if applicable

4. Tax Covenant: Specific provisions dealing with tax liabilities and indemnities

5. Regulatory Compliance: Additional provisions for regulated industries or when specific regulatory approvals are required

6. Multiple Sellers: Provisions governing relationship between multiple sellers if applicable

7. Security for Claims: Provisions for escrow or other security for warranty claims

8. Break Fee: Provisions for payment if the transaction fails to complete under certain circumstances

9. Employee Matters: Specific provisions dealing with key employees or employee-related liabilities

What schedules should be included in a Purchase Of Shares Agreement?

1. Details of the Company: Corporate information, share capital structure, and subsidiaries

2. Conditions Precedent: Detailed list of all conditions that must be satisfied

3. Warranties: Full set of seller's warranties about the company and business

4. Properties: Details of all real estate owned or leased by the company

5. Intellectual Property: List of all IP owned or licensed by the company

6. Material Contracts: Summary of key commercial contracts

7. Completion Obligations: Detailed list of documents to be delivered and actions to be taken at completion

8. Form of Resignation Letters: Template resignation letters for departing directors

9. Form of Board Resolutions: Template board resolutions approving the transfer

10. Disclosure Letter: Seller's disclosures against the warranties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Publisher

Genie AI

Cost

Free to use

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