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Share Transfer Agreement for Indonesia

Share Transfer Agreement Template for Indonesia

A comprehensive legal document governed by Indonesian law that formalizes the transfer of shares from one party (seller) to another (purchaser) in an Indonesian company. The agreement outlines the terms and conditions of the share transfer, including the purchase price, payment terms, representations and warranties, and completion requirements. It ensures compliance with Indonesian corporate law, particularly Law No. 40 of 2007 on Limited Liability Companies, and includes necessary provisions for regulatory approvals, tax considerations, and corporate governance requirements specific to the Indonesian jurisdiction.

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What is a Share Transfer Agreement?

The Share Transfer Agreement is a crucial document used in Indonesian corporate transactions when ownership of shares in a company needs to be legally transferred between parties. This document is essential for both private and public companies operating under Indonesian law, particularly complying with Law No. 40 of 2007 on Limited Liability Companies. It contains detailed provisions covering the sale terms, warranties, regulatory compliance requirements, and completion mechanics. The agreement is particularly important in Indonesia due to specific local requirements for share transfers, including mandatory involvement of an Indonesian notary, potential foreign investment restrictions, and specific corporate and regulatory approvals. The document serves multiple purposes: it protects both parties' interests, ensures legal compliance, provides clarity on the transaction terms, and creates a binding record of the share transfer that can be relied upon for corporate, regulatory, and tax purposes.

What sections should be included in a Share Transfer Agreement?

1. Parties: Identification of the Seller(s), Purchaser(s), and the Company whose shares are being transferred

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

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

4. Sale and Purchase of Shares: Core transaction terms including number of shares, price, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before completion of the transfer

6. Completion: Details of when, where, and how the transfer will be completed, including actions required at completion

7. Seller's Representations and Warranties: Warranties regarding share ownership, authority to sell, and company status

8. Purchaser's Representations and Warranties: Warranties regarding authority to purchase and ability to pay

9. Covenants: Pre and post-completion obligations of the parties

10. Tax Matters: Allocation of tax liabilities and responsibilities

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process for giving formal notices under the agreement

13. Governing Law and Dispute Resolution: Choice of Indonesian law and dispute resolution mechanisms

14. General Provisions: Standard boilerplate clauses including amendments, waivers, and severability

What sections are optional to include in a Share Transfer Agreement?

1. Regulatory Compliance: Required when the transfer needs specific regulatory approvals or involves regulated sectors

2. Foreign Investment Provisions: Needed when the transfer involves foreign investors and must comply with Indonesian foreign investment laws

3. Non-Competition: Include when the seller needs to be restricted from competing post-transfer

4. Management Transition: Required when the transfer involves changes in company management

5. Earn-out Provisions: Include when part of the purchase price is contingent on future performance

6. Tag-Along/Drag-Along Rights: Needed in cases involving multiple shareholders and future sale rights

7. Bank Guarantee/Security: Include when payment security or guarantees are required

What schedules should be included in a Share Transfer Agreement?

1. Details of the Shares: Detailed description of shares being transferred including share certificates numbers

2. Company Information: Key details about the company including registration number, registered office, and directors

3. Completion Checklist: List of all documents and actions required for completion

4. Form of Transfer Instruments: Template share transfer forms required under Indonesian law

5. Warranties: Detailed list of warranties given by the seller about the company and shares

6. Required Regulatory Approvals: List of required government or regulatory approvals

7. Existing Encumbrances: Details of any existing charges or encumbrances on the shares

8. Corporate Approvals: Copies of relevant board and shareholder resolutions

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

Agreement Contract

Cost

Free to use
Relevant legal definitions









































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Relevant Industries

Financial Services

Technology

Manufacturing

Real Estate

Mining

Agriculture

Retail

Healthcare

Education

Transportation

Energy

Telecommunications

Professional Services

Construction

Hospitality

Relevant Teams

Legal

Finance

Corporate Secretariat

Compliance

Risk Management

Investment

Mergers & Acquisitions

Business Development

Executive Leadership

Corporate Governance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Director

Corporate Secretary

Investment Manager

Mergers & Acquisitions Director

Corporate Lawyer

Finance Director

Business Development Director

Compliance Officer

Legal Counsel

Investment Banker

Financial Controller

Risk Manager

Company Director

Board Member

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