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A Stock Purchase Agreement is a legal contract that details the sale and transfer of company shares from a seller to a buyer in Indonesia. It spells out the key terms like price per share, payment method, and when the ownership actually changes hands under Indonesian corporate law (UU No. 40/2007 on Limited Liability Companies).

Beyond just recording the basic sale details, this agreement protects both parties by clearly stating their rights and obligations. It typically includes important safeguards like warranties about the company's condition, any conditions that must be met before closing, and how to handle disputes under Indonesian jurisdiction. For foreign investors, it must also comply with Indonesia's Investment Law and capital market regulations.

Use a Stock Purchase Agreement any time you're buying or selling shares in an Indonesian company, especially for significant ownership transfers. This applies to both private transactions between individual shareholders and larger corporate deals where one company acquires shares in another.

The agreement becomes essential when dealing with complex terms, like staged payments or conditional transfers. It's particularly important for foreign investment deals under Indonesian Investment Law, mergers and acquisitions, or when buying shares from multiple sellers. Having this agreement in place helps prevent future disputes about price, warranties, or transfer conditions by documenting everything clearly from the start.

• Stock Buy Back Agreement: Used when a company repurchases its own shares from existing shareholders, often as part of corporate restructuring or employee stock programs under Indonesian Company Law.
• Preliminary Share Purchase Agreement: A preliminary version that outlines key terms and conditions before the final Stock Purchase Agreement, commonly used in complex transactions or when due diligence is ongoing.

• Company Shareholders: Both individual and corporate shareholders who are selling their stock, often including foreign investors who must comply with Indonesian investment regulations.
• Corporate Buyers: Companies or individuals purchasing shares, including foreign entities subject to Indonesian foreign ownership restrictions.
• Corporate Legal Teams: In-house lawyers who draft and review agreements to ensure compliance with Indonesian Company Law.
• Investment Banks: Often involved in larger transactions, helping structure deals and ensure regulatory compliance.
• Notaries: Indonesian public notaries who must authenticate Stock Purchase Agreements for legal validity.

• Company Details: Gather complete legal names, registration numbers, and addresses of all parties involved, plus corporate approvals required under Indonesian law.
• Share Information: Document the exact number, class, and price of shares being transferred, including any existing encumbrances.
• Payment Terms: Specify payment method, timing, and any conditions for release of funds.
• Regulatory Compliance: Check foreign investment restrictions and capital market regulations if applicable.
• Supporting Documents: Collect company articles, shareholder approvals, and prepare for notarial deed requirements.

• Party Information: Full legal names, addresses, and registration numbers of buyer, seller, and the company whose shares are being sold.
• Share Details: Precise description of shares, including class, number, nominal value, and total purchase price.
• Representations & Warranties: Statements about company status, share ownership, and financial condition under Indonesian law.
• Closing Conditions: Required approvals, documentation, and regulatory clearances per UU No. 40/2007.
• Governing Law: Clear statement of Indonesian jurisdiction and dispute resolution mechanisms.
• Transfer Mechanics: Detailed process for executing the share transfer through Indonesian notarial deed.

A Stock Purchase Agreement differs significantly from an Asset Purchase Agreement in both scope and legal implications under Indonesian law. While both are acquisition tools, they serve distinct purposes in corporate transactions.

• Transaction Object: Stock Purchase Agreements transfer company ownership through share sales, while Asset Purchase Agreements deal with specific company assets, equipment, or property.
• Liability Transfer: Stock purchases automatically include all company liabilities, while asset purchases let buyers select specific assets without assuming all company debts.
• Regulatory Requirements: Stock transfers need shareholder approval and notarial deeds under Indonesian Company Law, while asset transfers may require different permits based on asset type.
• Tax Implications: Stock sales are typically subject to capital gains tax, while asset sales face various tax treatments depending on the asset type under Indonesian tax regulations.