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Shareholder Agreement
I need a shareholder agreement for a startup company with three co-founders, outlining each founder's equity stake, roles, and responsibilities, as well as provisions for decision-making processes, transfer of shares, and dispute resolution mechanisms. The agreement should also include clauses for protecting minority shareholders and addressing potential future funding rounds.
What is a Shareholder Agreement?
A Shareholder Agreement is a binding contract between a company's shareholders that sets clear rules for running the business and handling ownership matters. In Indonesia, this vital document complements the Articles of Association (Anggaran Dasar) and helps prevent disputes among business partners.
The agreement spells out key rights and obligations like share transfer restrictions, voting procedures, and profit distribution. It also covers critical situations such as shareholder exits, management appointments, and dispute resolution - all while following Indonesian Company Law (UU No. 40/2007). Many Indonesian businesses use these agreements to protect minority shareholders and maintain smooth operations.
When should you use a Shareholder Agreement?
Create a Shareholder Agreement when starting a new company or bringing in new investors to your Indonesian business. This agreement becomes especially important when you have multiple shareholders with different levels of investment, voting rights, or management roles.
Common trigger points include: expanding your business with new partners, protecting family-owned companies during succession planning, setting up clear exit mechanisms, or securing minority shareholder rights. Getting this agreement in place early helps prevent costly disputes and keeps your business aligned with Indonesian Company Law requirements, particularly for PT (Perseroan Terbatas) companies.
What are the different types of Shareholder Agreement?
- Shareholders Agreement Contract: The standard comprehensive agreement covering core rights, obligations, and governance structure
- Shareholder Buy Sell Agreement: Focuses specifically on share transfer rules and exit procedures
- Shareholder Purchase Agreement: Used when new shareholders join, detailing investment terms and share acquisition
- Shareholder Loan Agreement: Covers scenarios where shareholders provide financing to the company
- Shareholder Sale Agreement: Specialized for share sales between existing shareholders or to third parties
Who should typically use a Shareholder Agreement?
- Company Directors: Responsible for implementing and ensuring compliance with the agreement's terms in daily operations
- Major Shareholders: Key decision-makers who often initiate and negotiate the agreement's core terms
- Minority Shareholders: Rely on these agreements to protect their voting rights and investment interests
- Corporate Lawyers: Draft and review agreements to ensure compliance with Indonesian Company Law
- Investment Partners: Foreign or domestic investors who require these agreements before committing capital
- Company Secretary: Maintains records and ensures proper execution of shareholder-related procedures
How do you write a Shareholder Agreement?
- Company Details: Gather the complete legal name, registration number, and business address from your company's deed
- Shareholder Information: List all shareholders' details, including their ownership percentages and contact information
- Capital Structure: Document share classes, values, and any planned future share issuances
- Voting Rights: Define decision-making thresholds and special voting privileges for key business matters
- Transfer Rules: Outline share transfer restrictions, right of first refusal, and exit procedures
- Management Structure: Clarify roles, appointment processes, and decision-making authority
- Final Review: Use our platform to generate a complete, legally-sound agreement that meets Indonesian legal requirements
What should be included in a Shareholder Agreement?
- Party Details: Full legal names, addresses, and registration numbers of the company and all shareholders
- Share Structure: Details of share classes, values, and distribution among shareholders
- Voting Rights: Clear procedures for shareholder meetings and voting mechanisms
- Transfer Provisions: Rules for selling shares, including pre-emptive rights and tag-along rights
- Management Rights: Board composition, appointment procedures, and decision-making thresholds
- Dispute Resolution: Indonesian law-compliant mediation and arbitration procedures
- Exit Mechanisms: Procedures for shareholder withdrawal or company dissolution
- Governing Law: Express reference to Indonesian Company Law (UU No. 40/2007)
What's the difference between a Shareholder Agreement and a Joint Venture Shareholders' Agreement?
A Shareholder Agreement differs significantly from a Joint Venture Shareholders' Agreement in several key aspects, though both are crucial for Indonesian business structures. While a standard Shareholder Agreement governs relationships between all shareholders in a single company, a Joint Venture Agreement specifically deals with two or more separate companies forming a new business entity.
- Scope and Purpose: Shareholder Agreements focus on internal governance and shareholder rights, while Joint Venture Agreements emphasize collaboration terms between partner companies
- Party Structure: Shareholder Agreements involve individuals or entities as direct shareholders, while Joint Ventures typically involve corporate entities as strategic partners
- Resource Allocation: Joint Ventures detail specific contributions of technology, assets, or expertise from each partner company - something rarely found in standard Shareholder Agreements
- Exit Mechanisms: Joint Ventures often include special provisions for partner buyouts and project completion, beyond typical share transfer rules
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