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Common Stock Subscription Agreement for Indonesia

Common Stock Subscription Agreement Template for Indonesia

A legally binding agreement governed by Indonesian law that documents the terms and conditions under which an investor (subscriber) agrees to purchase newly issued common shares from a company. The agreement complies with Law No. 40 of 2007 on Limited Liability Companies and related Indonesian regulations, detailing the number of shares, purchase price, payment terms, representations and warranties, and closing conditions. It includes specific provisions required under Indonesian corporate law, such as compliance with foreign investment restrictions, mandatory use of Indonesian language, and requirements for notarial deeds where applicable.

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What is a Common Stock Subscription Agreement?

The Common Stock Subscription Agreement serves as a crucial document in Indonesian corporate transactions, used when a company seeks to issue new shares to raise capital from investors. The agreement must comply with Indonesian Company Law (Law No. 40 of 2007) and various regulations from the Financial Services Authority (OJK) and Investment Coordinating Board (BKPM). It outlines the complete terms of share subscription, including share price, payment mechanisms, representations and warranties, and closing conditions. For foreign investors, additional provisions address investment restrictions and currency regulations. The document typically requires notarization and may need to be drafted bilingually in Indonesian and English, with the Indonesian version prevailing in case of inconsistencies.

What sections should be included in a Common Stock Subscription Agreement?

1. Parties: Identification of the Company and the Subscriber(s), including their complete legal names, registration numbers, and addresses

2. Background: Context of the transaction, including the Company's current capital structure and the purpose of the share subscription

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

4. Subscription and Issuance: Details of shares being subscribed, including number, class, and nominal value

5. Subscription Price: Total consideration and price per share, including currency and payment method

6. Closing Conditions: Conditions precedent that must be satisfied before the subscription is completed

7. Closing Mechanics: Process and timeline for completing the subscription, including document delivery and payment procedures

8. Company Representations and Warranties: Company's statements regarding its legal status, authority, and business condition

9. Subscriber Representations and Warranties: Subscriber's statements regarding authority, financial capacity, and compliance with laws

10. Covenants: Ongoing obligations of both parties before and after closing

11. Termination: Circumstances under which the agreement may be terminated and the consequences

12. Notices: Process and contact details for formal communications between parties

13. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanisms

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

What sections are optional to include in a Common Stock Subscription Agreement?

1. Foreign Investment Provisions: Required when the subscriber is a foreign entity, addressing compliance with Indonesian foreign investment regulations

2. Anti-Dilution Rights: Protection mechanisms for maintaining the subscriber's ownership percentage in future share issuances

3. Tag-Along Rights: Right of the subscriber to join in the sale of shares by other shareholders

4. Board Appointment Rights: Rights of the subscriber to appoint directors or commissioners

5. Multiple Closing Provisions: Required when the subscription will be completed in multiple tranches

6. Currency Conversion: Required when payment is made in foreign currency, addressing exchange rate mechanisms

7. Regulatory Compliance: Specific provisions required for regulated industries or public companies

8. Employee Matters: Required for employee stock ownership programs or when employment-related conditions exist

What schedules should be included in a Common Stock Subscription Agreement?

1. Schedule 1 - Share Details: Detailed information about the shares being subscribed, including class rights and restrictions

2. Schedule 2 - Closing Deliverables: List of documents and items to be delivered at closing

3. Schedule 3 - Company Information: Details of the Company's corporate information, including capital structure and subsidiaries

4. Schedule 4 - Company Disclosure Schedule: Exceptions and qualifications to the Company's representations and warranties

5. Schedule 5 - Form of Officer's Certificate: Template for certification of closing conditions and corporate approvals

6. Schedule 6 - Required Governmental Approvals: List of regulatory approvals required for the subscription

7. Appendix A - Shareholders Resolution: Form of shareholders resolution approving the share issuance

8. Appendix B - Board Resolution: Form of board resolution approving the share issuance

9. Appendix C - Share Certificate Specimen: Form of share certificate to be issued

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

Document Type

Stock Agreement

Cost

Free to use
Relevant legal definitions







































Clauses







































Relevant Industries

Technology

Manufacturing

Financial Services

Real Estate

Infrastructure

Energy

Healthcare

Consumer Goods

Agriculture

Mining

Transportation

Telecommunications

Education

Retail

Professional Services

Relevant Teams

Legal

Finance

Corporate Secretarial

Compliance

Investment

Risk Management

Corporate Development

Investor Relations

Board of Directors

Executive Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Secretary

Investment Director

Legal Counsel

Corporate Lawyer

Finance Director

Investment Manager

Compliance Officer

Board Director

Commissioner

Financial Controller

Corporate Development Manager

Investor Relations Manager

Due Diligence Officer

Risk Management Officer

Industries








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