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A Joint Venture Shareholders' Agreement spells out how two or more companies will run their shared business venture in Indonesia. It sets clear rules for decision-making, profit sharing, and handling disputes between the partners. Under Indonesian Company Law, these agreements are especially important when foreign investors team up with local businesses to meet domestic ownership requirements.

The agreement covers crucial details like board composition, transfer of shares, and exit strategies. It protects both majority and minority shareholders' interests, while ensuring compliance with Indonesia's Investment Coordinating Board (BKPM) regulations. Partners typically sign this agreement alongside their company's Articles of Association, making it a key document for successful joint ventures.

Consider setting up a Joint Venture Shareholders' Agreement when partnering with other companies to launch a business in Indonesia, especially during the initial investment planning phase. This timing helps prevent future disputes and ensures smooth operations from day one. It's particularly vital when foreign investors need to partner with local companies to meet Indonesia's foreign ownership restrictions.

The agreement becomes essential before major business decisions, like expanding operations, changing management structure, or bringing in new investors. Companies entering regulated sectors such as mining, telecommunications, or financial services need this agreement to clearly define roles and responsibilities while meeting sector-specific compliance requirements under Indonesian law.

• Basic Two-Party Agreement: Standard Joint Venture Shareholders' Agreement for straightforward partnerships between two companies, focusing on core governance and profit-sharing terms
• Multi-Party Complex Structure: Used when three or more partners join forces, with detailed provisions for voting rights and decision hierarchies
• Industry-Specific Format: Tailored versions for regulated sectors like mining or banking, incorporating specific compliance requirements under Indonesian law
• Foreign Investment Version: Specialized format addressing foreign ownership limits, BKPM requirements, and currency controls
• Project-Based Structure: Time-bound agreements for specific ventures, with clear entry and exit provisions

• Joint Venture Partners: Local and foreign companies forming the partnership, who must sign and comply with all agreement terms
• Corporate Legal Teams: In-house lawyers who draft initial versions and ensure compliance with Indonesian investment laws
• External Law Firms: Specialist attorneys who refine complex provisions and handle negotiations between parties
• Board Members: Directors and commissioners who implement governance structures outlined in the agreement
• BKPM Officials: Investment board representatives who review agreements for compliance with foreign ownership regulations
• Company Shareholders: Existing stockholders whose rights and obligations are affected by the joint venture terms

• Partner Details: Gather complete company information, ownership structures, and registration documents for all parties
• Business Plan: Document proposed capital contributions, profit-sharing ratios, and operational responsibilities
• Governance Structure: Map out board composition, voting rights, and key management positions
• Regulatory Checks: Review BKPM requirements and sector-specific ownership limits for your industry
• Exit Mechanisms: Define share transfer rules, buyout procedures, and dispute resolution methods
• Internal Approvals: Secure necessary board and shareholder authorizations from all parties
• Documentation: Prepare supporting documents like business licenses and financial statements

• Party Information: Full legal names, registration numbers, and addresses of all joint venture partners
• Capital Structure: Detailed breakdown of shareholding percentages and contribution requirements
• Board Composition: Rules for appointing directors and commissioners under Indonesian Company Law
• Reserved Matters: List of decisions requiring special majority or unanimous approval
• Transfer Restrictions: Rules on share transfers, right of first refusal, and tag-along rights
• Dispute Resolution: Clear procedures for mediation and arbitration under Indonesian jurisdiction
• Exit Mechanisms: Deadlock resolution and buyout procedures aligned with BKPM regulations
• Governing Law: Explicit statement of Indonesian law as governing authority

A Joint Venture Shareholders' Agreement differs significantly from a Joint Venture Agreement in several key aspects, particularly under Indonesian law. While both documents govern business partnerships, their scope and application vary considerably.

• Legal Structure: A Joint Venture Shareholders' Agreement specifically governs relationships between shareholders in a formally incorporated company, while a Joint Venture Agreement can cover looser collaborations without forming a new legal entity
• Regulatory Compliance: Shareholders' Agreements must align with Indonesian Company Law and BKPM regulations, whereas Joint Venture Agreements have more flexibility in their terms
• Corporate Governance: Shareholders' Agreements include detailed provisions for board structure and voting rights, while Joint Venture Agreements focus more on operational collaboration
• Exit Mechanisms: Shareholders' Agreements contain specific share transfer provisions and valuation methods, whereas Joint Venture Agreements typically focus on project completion and asset division