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Partnership Buy Sell Agreement for Indonesia

Partnership Buy Sell Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes the terms and conditions for the transfer of partnership interests in various scenarios such as death, retirement, disability, or voluntary exit of a partner. The document outlines specific procedures for valuation, purchase mechanisms, and payment terms while ensuring compliance with Indonesian commercial and civil law requirements. It serves as a crucial business continuity tool by providing clear protocols for ownership transitions and protecting both departing partners and the continuing business interests.

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What is a Partnership Buy Sell Agreement?

The Partnership Buy Sell Agreement is a vital business planning document used in Indonesian business partnerships to establish clear protocols for ownership transitions. This agreement becomes essential when multiple partners own a business and need to plan for future ownership changes, whether triggered by retirement, death, disability, or voluntary exit. Operating under Indonesian law, particularly the Civil Code (KUHPerdata) and Commercial Code (KUHD), the agreement includes detailed provisions for valuation methods, payment terms, funding mechanisms, and transfer procedures. It protects both the departing partners' interests and the business's continuity by preventing unwanted third-party ownership and ensuring fair compensation for partnership interests. The document typically incorporates insurance provisions, tax considerations, and compliance with Indonesian investment regulations, especially when foreign partners are involved.

What sections should be included in a Partnership Buy Sell Agreement?

1. Parties: Identification of all partners and the partnership entity

2. Background: Context of the agreement and current partnership structure

3. Definitions: Key terms used throughout the agreement

4. Purpose and Scope: Objectives of the buy-sell agreement and its application

5. Trigger Events: Circumstances that activate the buy-sell provisions (death, retirement, disability, etc.)

6. Purchase Price and Valuation: Methods for determining the value of partnership interests

7. Payment Terms: Structure and timing of payments for purchased interests

8. Funding Mechanism: Sources of funding for purchases, including insurance policies

9. Right of First Refusal: Process for existing partners to purchase available interests

10. Transfer Restrictions: Limitations on transferring partnership interests

11. Tax Considerations: Tax treatment of transfers and payments

12. Dispute Resolution: Procedures for resolving disagreements

13. Governing Law: Applicable Indonesian law and jurisdiction

14. Notices: Communication requirements and procedures

15. Amendment Process: Procedures for modifying the agreement

16. General Provisions: Miscellaneous legal provisions including severability and entire agreement

What sections are optional to include in a Partnership Buy Sell Agreement?

1. Disability Provisions: Detailed procedures for handling partner disability, used when partners want specific disability provisions beyond standard trigger events

2. Family Transfer Exceptions: Special provisions for transfers to family members, included when family succession is anticipated

3. Drag-Along Rights: Provisions forcing minority partners to join in sale of business, used in partnerships with significant ownership disparities

4. Tag-Along Rights: Rights of minority partners to join in sale of majority interests, used to protect minority partners

5. International Provisions: Special provisions for international partners, included when foreign partners are involved

6. Industry-Specific Provisions: Special provisions related to specific industry requirements or regulations

7. Intellectual Property Rights: Provisions dealing with IP ownership and transfer, important for knowledge-based businesses

8. Non-Competition Provisions: Restrictions on competing activities after exit, used when protecting business interests is crucial

What schedules should be included in a Partnership Buy Sell Agreement?

1. Schedule A - Current Partnership Interests: Details of current ownership percentages and capital contributions

2. Schedule B - Valuation Formula: Detailed methodology for calculating partnership interest values

3. Schedule C - Insurance Policies: List of life insurance policies funding the agreement

4. Schedule D - Approved Appraisers: List of pre-approved business appraisers for valuation

5. Appendix 1 - Transfer Notice Form: Standard form for initiating interest transfers

6. Appendix 2 - Purchase Option Notice: Standard form for exercising purchase options

7. Appendix 3 - Valuation Report Template: Template for periodic business valuations

8. Appendix 4 - Partner Consent Form: Standard form for partner approval of transfers

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

Contract to Sell

Cost

Free to use
Relevant legal definitions


















































Clauses



































Relevant Industries

Professional Services

Manufacturing

Retail

Technology

Construction

Healthcare

Hospitality

Real Estate

Agriculture

Mining

Transportation

Education

Financial Services

Consulting

Media and Entertainment

Relevant Teams

Legal

Finance

Corporate Governance

Executive Leadership

Risk Management

Compliance

Business Development

Corporate Affairs

Treasury

Tax

Relevant Roles

Managing Partner

Business Owner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Business Development Director

Finance Director

Managing Director

Partner

Board Member

Company Director

Compliance Officer

Risk Manager

Investment Manager

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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