Shareholder Transfer Agreement Template for Indonesia

The Shareholder Transfer Agreement is a crucial document used when one shareholder wishes to transfer their shares to another party in an Indonesian company. This agreement is essential for documenting the terms and conditions of share transfers in compliance with Indonesian Law No. 40 of 2007 on Limited Liability Companies and related regulations. It becomes particularly important in scenarios involving foreign investment, where additional regulatory requirements may apply. The document typically includes details about the shares being transferred, purchase price, payment terms, representations and warranties, and completion mechanics. It must be structured to accommodate specific Indonesian legal requirements, including notarization requirements and regulatory approvals from relevant authorities such as the Ministry of Law and Human Rights and, where applicable, the Investment Coordinating Board (BKPM).

1. Parties: Identification of the transferor (selling shareholder), transferee (purchasing shareholder), and the company whose shares are being transferred

2. Background: Context of the transfer, including current shareholding structure and reason for transfer

3. Definitions: Key terms used throughout the agreement, including Share definition, Completion Date, Purchase Price, etc.

4. Sale and Purchase of Shares: Core transaction terms including number of shares, price per share, and total consideration

5. Purchase Price and Payment: Payment terms, method, and timing of the purchase price payment

6. Conditions Precedent: Prerequisites that must be fulfilled before the transfer can be completed

7. Completion: Specific actions to be taken at completion, including document delivery and payment

8. Representations and Warranties: Statements of fact by both parties regarding their capacity, authority, and the shares being transferred

9. Covenants: Ongoing obligations of the parties, including cooperation for regulatory approvals

10. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

11. Notices: Process and addresses for formal communications between parties

12. General Provisions: Standard boilerplate clauses including amendments, waiver, and severability