Document background
The Shareholder Settlement Agreement is a crucial document used in Indonesian corporate practice to formally resolve disputes or disagreements between shareholders of a company. It becomes necessary when shareholders face conflicts over various issues such as management decisions, dividend distributions, share valuations, or corporate governance matters. The agreement must comply with Indonesian corporate law, particularly Law No. 40 of 2007, and often requires approval from the company's board of directors. It serves to document the terms of settlement, including any share transfers, payment obligations, mutual releases, and future arrangements between parties. This type of agreement is particularly important in Indonesia's business environment, where maintaining harmonious business relationships while ensuring legal compliance is essential. The document typically requires careful drafting to ensure enforceability under Indonesian law and may need to consider additional regulatory requirements if the company is publicly listed.
