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Stock Transfer Agreement for Indonesia

Stock Transfer Agreement Template for Indonesia

A Stock Transfer Agreement under Indonesian law is a legally binding document that facilitates the transfer of shares from one party (seller) to another (buyer) in an Indonesian company. The agreement must comply with Law No. 40 of 2007 on Limited Liability Companies and other relevant Indonesian regulations, including foreign investment laws where applicable. It outlines the terms and conditions of the share transfer, including purchase price, payment terms, warranties, and necessary corporate approvals. The document requires specific formalities under Indonesian law, including potential notarization and regulatory approvals, particularly when involving foreign investors or regulated industries.

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What is a Stock Transfer Agreement?

The Stock Transfer Agreement is a crucial document used when transferring ownership of shares in an Indonesian company from one party to another. It is essential for both private and public companies operating under Indonesian jurisdiction, though additional requirements apply for publicly listed companies. The agreement must conform to Indonesian Company Law (Law No. 40 of 2007) and may require specific approvals from corporate organs and regulatory bodies, especially in cases involving foreign investment. This document typically includes detailed provisions on share valuation, payment terms, representations and warranties, and completion mechanisms. It's particularly important in mergers and acquisitions, corporate restructuring, and investment transactions, requiring careful consideration of Indonesian foreign investment restrictions, tax implications, and corporate governance requirements.

What sections should be included in a Stock Transfer Agreement?

1. Parties: Identification of the transferor (seller) and transferee (buyer) with complete legal names and addresses

2. Background: Context of the transaction, including details about the company whose shares are being transferred and the purpose of the transfer

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

4. Sale and Purchase of Shares: Core transaction terms including number of shares, class of shares, and percentage of ownership being transferred

5. Purchase Price: Details of the purchase price, payment method, and timing of payment

6. Completion: Procedures and requirements for closing the transaction, including signing and delivery of documents

7. Seller's Warranties: Warranties regarding share ownership, authority to sell, and status of the shares

8. Buyer's Warranties: Warranties regarding authority to purchase and compliance with relevant laws

9. Corporate Approvals: Required approvals from company organs as per Indonesian Company Law

10. Confidentiality: Obligations to maintain confidentiality of the transaction and company information

11. Governing Law and Dispute Resolution: Specification of Indonesian law as governing law and dispute resolution mechanism

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

13. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability

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

1. Conditions Precedent: Used when completion is subject to certain conditions being met, such as regulatory approvals or third-party consents

2. Foreign Investment Compliance: Required when the buyer is a foreign entity, addressing compliance with Indonesian foreign investment laws

3. Tax Provisions: Detailed tax arrangements when specific tax structuring is required

4. Escrow Arrangements: When part of the purchase price is to be held in escrow

5. Non-Competition: Restrictions on seller's future business activities, if required

6. Multiple Sellers Provisions: Required when there are multiple selling shareholders

7. Share Retention: When there are restrictions on the buyer's ability to transfer the shares post-completion

8. Post-Completion Covenants: Specific obligations of parties after completion of the transfer

What schedules should be included in a Stock Transfer Agreement?

1. Share Details: Detailed description of the shares being transferred, including share certificates numbers and dates of issue

2. Company Information: Key details about the company including corporate registration numbers, directors, and shareholders

3. Form of Transfer Instruments: Template forms for share transfer deed and other required transfer documents under Indonesian law

4. Corporate Approvals: Copies of relevant corporate approvals, board resolutions, and shareholder resolutions

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

6. Payment Details: Bank account details and payment instructions

7. Required Regulatory Filings: List of notifications and filings required under Indonesian law

8. Completion Checklist: List of all documents and actions required for completion of the transfer

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

Banking & Financial Services

Manufacturing

Technology

Real Estate

Mining

Agriculture

Retail

Healthcare

Transportation

Energy

Telecommunications

Professional Services

Construction

Consumer Goods

Education

Relevant Teams

Legal

Corporate Secretarial

Finance

Compliance

Tax

Corporate Development

Mergers & Acquisitions

Investment Relations

Risk Management

Executive Leadership

Treasury

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Secretary

Legal Counsel

Investment Manager

Compliance Officer

Financial Controller

Board Director

Managing Director

Corporate Lawyer

Investment Banker

Tax Manager

M&A Director

Business Development Manager

Risk Manager

Company Director

Shareholder Relations 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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