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80 20 Partnership Agreement for Indonesia

80 20 Partnership Agreement Template for Indonesia

This agreement establishes a partnership arrangement under Indonesian law where profits and losses are distributed in an 80/20 ratio between partners. The document complies with Indonesian Civil Code requirements and relevant business regulations, particularly Law No. 40 of 2007 on Limited Liability Companies and Law No. 25 of 2007 on Investment. It details capital contributions, profit-sharing mechanisms, management responsibilities, operational procedures, and dispute resolution methods, while ensuring compliance with local partnership and investment regulations.

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80 20 Partnership Agreement

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What is a 80 20 Partnership Agreement?

The 80 20 Partnership Agreement is a specialized contract commonly used in Indonesian business arrangements where one partner provides the majority of capital investment (typically 80%) while the other partner contributes expertise, operational management, or other valuable resources (receiving 20% of profits). This document is essential for businesses seeking to establish clear profit-sharing arrangements while complying with Indonesian partnership laws and regulations. It is particularly useful in scenarios where investors want to partner with local operators, industry experts, or management professionals. The agreement must conform to Indonesian Civil Code requirements, investment regulations, and relevant business laws, making it suitable for both domestic and foreign investment partnerships. Key considerations include capital contribution requirements, management rights, profit distribution mechanisms, and compliance with local business regulations.

What sections should be included in a 80 20 Partnership Agreement?

1. Parties: Identification and details of the partnership parties

2. Background: Context of the partnership and brief description of the parties' intentions

3. Definitions: Definitions of key terms used throughout the agreement

4. Partnership Structure: Details of the 80/20 partnership arrangement and legal form of the partnership

5. Capital Contributions: Specification of initial and ongoing capital contributions from each partner

6. Profit and Loss Sharing: Detailed mechanism for the 80/20 profit sharing arrangement and loss allocation

7. Management and Control: Decision-making processes and management structure of the partnership

8. Rights and Obligations: Specific rights and responsibilities of each partner

9. Business Operations: Day-to-day operational procedures and business management

10. Financial Management: Accounting procedures, financial reporting, and banking arrangements

11. Term and Termination: Duration of the partnership and conditions for termination

12. Dispute Resolution: Procedures for resolving conflicts between partners

13. Governing Law: Specification of Indonesian law as governing law and jurisdiction

14. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

What sections are optional to include in a 80 20 Partnership Agreement?

1. Non-Competition: Restrictions on partners engaging in competing businesses - include when partners operate in the same industry

2. Intellectual Property Rights: Management of IP rights - include when the partnership involves creation or use of intellectual property

3. Insurance: Required insurance coverage - include for high-risk business activities

4. Employee Management: Procedures for hiring and managing employees - include when the partnership will have employees

5. Exit Strategy: Detailed procedures for partner exit or business sale - include for complex or high-value partnerships

6. Foreign Investment Provisions: Compliance with Indonesian foreign investment laws - include when one partner is foreign

7. Asset Management: Procedures for managing partnership assets - include when partnership owns significant assets

What schedules should be included in a 80 20 Partnership Agreement?

1. Schedule A - Capital Contributions: Detailed breakdown of each partner's initial and committed capital contributions

2. Schedule B - Profit Distribution Formula: Detailed calculation method for the 80/20 profit sharing arrangement

3. Schedule C - Business Plan: Initial business plan and strategic objectives

4. Schedule D - Management Structure: Organizational chart and management responsibilities

5. Schedule E - Financial Procedures: Detailed accounting and financial management procedures

6. Appendix 1 - Partner Information: Detailed information about each partner including registration documents

7. Appendix 2 - Required Licenses: Copies of business licenses and permits

8. Appendix 3 - Asset Register: List of partnership assets and their ownership status

Authors

Alex Denne

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

Jurisdiction

Indonesia

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions








































Clauses












































Relevant Industries

Technology and Digital Services

Manufacturing

Real Estate Development

Retail and Distribution

Agriculture and Farming

Mining and Natural Resources

Food and Beverage

Tourism and Hospitality

Professional Services

Construction

Transportation and Logistics

Education Services

Healthcare Services

Creative Industries

Relevant Teams

Legal

Finance

Corporate Development

Business Development

Operations

Risk and Compliance

Investment

Strategy

Commercial

Corporate Secretariat

Relevant Roles

Chief Executive Officer

Managing Director

Business Development Manager

Legal Counsel

Chief Financial Officer

Investment Manager

Operations Director

Partnership Manager

Corporate Lawyer

Business Owner

Entrepreneur

Finance Director

Commercial Director

Risk Manager

Compliance Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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