黑料视频

Share Subscription Agreement Template for Indonesia

A Share Subscription Agreement is a legally binding document governed by Indonesian law that formalizes the terms and conditions under which an investor (subscriber) agrees to purchase newly issued shares in a company. The agreement must comply with Law No. 40 of 2007 on Limited Liability Companies and related regulations, including specific requirements for foreign investment under BKPM regulations where applicable. This document outlines crucial elements such as share price, payment terms, representations and warranties, and completion mechanics, while ensuring adherence to Indonesian corporate law requirements for share issuance and capital structure changes.

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What is a Share Subscription Agreement?

A Share Subscription Agreement is essential for Indonesian companies seeking to raise capital through the issuance of new shares. This document is commonly used in various corporate scenarios, including startup funding rounds, corporate expansions, or strategic investments. The agreement must align with Indonesian regulatory requirements, particularly Law No. 40 of 2007 on Limited Liability Companies and, for foreign investments, the relevant BKPM regulations. It includes detailed provisions on share valuation, payment mechanisms, warranties, and completion procedures. The document serves as both a legal requirement and a practical framework for implementing share subscriptions while protecting the interests of all parties involved. It's particularly important in the Indonesian context due to specific local requirements for corporate governance, foreign investment restrictions, and regulatory compliance.

What sections should be included in a Share Subscription Agreement?

1. Parties: Identification of the Company issuing shares and the Subscriber(s)

2. Background: Context of the transaction, including company's current share capital structure and reason for share issuance

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Subscription of Shares: Details of shares being subscribed, including number, class, and nominal value

5. Subscription Price: Total consideration payable and price per share

6. Completion: Timing and mechanics of the subscription completion, including conditions precedent

7. Payment Terms: Method, timing, and currency of payment for the subscribed shares

8. Company's Representations and Warranties: Company's statements regarding its status, authority, and share capital

9. Subscriber's Representations and Warranties: Subscriber's statements regarding capacity, authority, and funding source

10. Covenants: Ongoing obligations of both parties before and after completion

11. Confidentiality: Obligations regarding confidential information

12. Notices: Process and details for formal communications between parties

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

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

15. Execution: Signature blocks and execution formalities

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

1. Tag-Along Rights: Include when minority shareholders need protection to join in sales by majority shareholders

2. Drag-Along Rights: Include when majority shareholders need the right to force minorities to join in a sale

3. Anti-Dilution Protection: Include for preferred shares or when investors require protection against future down-rounds

4. Board Appointment Rights: Include when subscriber is to receive board representation rights

5. Dividend Rights: Include when specific dividend rights are attached to the subscribed shares

6. Foreign Investment Provisions: Include when subscriber is a foreign investor, addressing BKPM requirements

7. Share Transfer Restrictions: Include when parties agree to specific restrictions on future share transfers

8. Right of First Refusal: Include when existing shareholders should have priority rights to purchase shares

9. Management Rights: Include when subscriber is to receive specific management or veto rights

What schedules should be included in a Share Subscription Agreement?

1. Share Capital Structure: Details of pre- and post-subscription share capital structure

2. Conditions Precedent: List of all conditions to be satisfied before completion

3. Completion Requirements: Detailed list of documents and actions required at completion

4. Company Disclosure Schedule: Exceptions and disclosures to company warranties

5. Form of Shareholders' Resolution: Draft resolution approving the share issuance

6. Form of Board Resolution: Draft resolution approving the share issuance

7. Form of Share Certificate: Template of share certificate to be issued

8. Corporate Documents: Copies of key corporate documents including articles of association

9. Payment Instructions: Bank account and payment details for subscription amount

Authors

Alex Denne

Head of Growth (Open Source Law) @ 黑料视频 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Publisher

黑料视频

Cost

Free to use

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