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An Operating Agreement sets the ground rules for how a limited liability company (LLC) or similar business entity runs in Indonesia. It spells out how owners make decisions, share profits, handle disputes, and manage daily operations - much like a rulebook for your company.

Under Indonesian company law, while not strictly required for Perseroan Terbatas (PT) companies, having this agreement helps prevent misunderstandings between business partners. It covers important details like voting rights, capital contributions, management roles, and what happens if someone wants to leave the business. Many Indonesian entrepreneurs use it alongside their deed of establishment for extra clarity and protection.

Create an Operating Agreement when starting a new business partnership or LLC in Indonesia, especially before making major investments or bringing in new partners. This agreement becomes crucial during rapid growth phases, when expanding operations, or if your business structure changes significantly.

The timing matters most when setting up complex profit-sharing arrangements, defining specific management roles, or establishing clear decision-making processes. Indonesian businesses often put this agreement in place alongside their PT formation documents, particularly when foreign investment is involved or when partners have different levels of capital contribution and operational involvement.

• Small Business Operating Agreement: Basic version ideal for small PT companies, covering essential management and profit-sharing terms
• Manager Managed Operating Agreement: Designed for businesses where professional managers run daily operations instead of owners
• Multi Member Operating Agreement: Comprehensive agreement for companies with multiple shareholders, detailing complex voting rights and profit distributions
• Joint Operation Agreement: Specialized version for temporary business collaborations or project-specific partnerships
• Limited Liability Company Agreement: Detailed structure for foreign investment companies (PMA) with enhanced liability protection provisions

• Business Owners/Founders: Primary stakeholders who initiate and sign the Operating Agreement, defining their rights, responsibilities, and ownership stakes
• Corporate Lawyers: Draft and review agreements to ensure compliance with Indonesian business law and protect client interests
• Company Directors: Execute the agreement's terms and ensure day-to-day operations align with established protocols
• Foreign Investors: Rely on these agreements when entering Indonesian business partnerships, particularly in PMA structures
• Business Managers: Implement and follow operational guidelines set forth in the agreement while managing daily activities
• Company Secretary: Maintains and updates the agreement, ensuring proper documentation and compliance

• Company Details: Gather basic information including business name, registration number, and ownership structure
• Capital Structure: Document each member's initial investment, profit-sharing percentages, and future contribution requirements
• Management Roles: Define clear decision-making powers, voting rights, and daily operational responsibilities
• Business Rules: Outline procedures for meetings, conflict resolution, and adding/removing members
• Legal Compliance: Ensure alignment with Indonesian PT requirements and investment regulations
• Exit Strategy: Plan procedures for business dissolution, member withdrawal, or ownership transfer
• Document Generation: Use our platform to create a legally-sound agreement that includes all required elements

• Company Identity: Full legal name, registration number, and business address as registered with Indonesian authorities
• Ownership Structure: Detailed breakdown of capital contributions, share percentages, and profit distribution formulas
• Management Framework: Clear hierarchy, voting procedures, and decision-making protocols aligned with PT regulations
• Financial Provisions: Capital accounts, profit/loss allocation, and tax handling procedures
• Operational Rules: Daily management responsibilities, meeting requirements, and record-keeping obligations
• Dispute Resolution: Mediation procedures and jurisdiction selection under Indonesian law
• Transfer Provisions: Rules for selling shares, adding members, or business dissolution
• Compliance Statement: Declaration of adherence to Indonesian company law and foreign investment regulations

An Operating Agreement differs significantly from a Business Acquisition Agreement in both purpose and scope. While both are crucial business documents in Indonesia, they serve distinct functions in different phases of business operations.

• Primary Purpose: Operating Agreements govern ongoing internal business operations and relationships between owners, while Business Acquisition Agreements handle one-time business purchases or mergers
• Duration: Operating Agreements remain active throughout the company's life, but Business Acquisition Agreements typically conclude once the purchase is complete
• Scope of Coverage: Operating Agreements detail day-to-day management, profit sharing, and decision-making processes, whereas Business Acquisition Agreements focus on purchase terms, asset transfers, and transition arrangements
• Party Involvement: Operating Agreements bind internal stakeholders (owners/members), while Business Acquisition Agreements involve separate entities (buyer and seller)
• Legal Requirements: Under Indonesian law, Operating Agreements are common for PTs and PMAs, while Business Acquisition Agreements require specific regulatory approvals for ownership transfers