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Entity Operating Agreement Template for Indonesia

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Key Requirements PROMPT example:

Entity Operating Agreement

"I need an Entity Operating Agreement for a new joint venture between our Singapore-based tech company and an Indonesian manufacturing partner, with operations starting March 2025, including specific provisions for technology transfer and foreign investment requirements."

Document background
The Entity Operating Agreement serves as the foundational document for business entities operating in Indonesia, providing essential governance and operational frameworks in compliance with Indonesian law, particularly Law No. 40 of 2007 on Limited Liability Companies. This document is typically required when establishing a new business entity, restructuring an existing one, or when multiple parties come together to operate a business in Indonesia. The agreement encompasses crucial elements such as capital structure, management arrangements, shareholder rights, and operational procedures, while ensuring compliance with local regulatory requirements. It's particularly important for foreign investors, as it must incorporate specific provisions required by Indonesian investment laws and regulations. The document should be prepared in both Indonesian and English languages, with the Indonesian version prevailing in case of inconsistencies, as required by Law No. 24 of 2009.
Suggested Sections

1. Parties: Identification of all members/shareholders of the entity, including their full legal names, addresses, and registration details

2. Background: Context of the agreement, including the entity's formation purpose and basic business objectives

3. Definitions: Defined terms used throughout the agreement for clarity and consistency

4. Company Formation: Details of the entity's legal structure, registration status, and business activities

5. Capital Structure: Capital contributions, shareholding percentages, and rules for capital changes

6. Management Structure: Governance framework, including roles of directors, commissioners, and shareholders

7. Shareholder Rights and Obligations: Rights, responsibilities, and obligations of all shareholders/members

8. Meeting Procedures: Rules for conducting shareholder and board meetings, including voting procedures

9. Transfer of Shares: Procedures and restrictions for transferring ownership interests

10. Financial Management: Financial procedures, accounting practices, and distribution of profits

11. Dispute Resolution: Procedures for resolving conflicts between parties

12. Termination: Conditions and procedures for terminating the agreement or dissolving the entity

13. Governing Law: Specification of Indonesian law as governing law and relevant jurisdictions

14. General Provisions: Miscellaneous legal provisions including notices, amendments, and severability

Optional Sections

1. Foreign Investment Provisions: Required when foreign investors are involved, detailing compliance with Indonesian foreign investment laws

2. Intellectual Property Rights: Needed when the entity owns or manages significant IP assets

3. Non-Competition: Relevant when parties need to be restricted from competing activities

4. Employee Matters: Required when the agreement needs to address specific employment policies or management positions

5. Related Party Transactions: Necessary when there are significant business relationships between related parties

6. Environmental Compliance: Required for businesses with environmental impact considerations

7. Special Business Licenses: Needed for regulated industries requiring specific permits or licenses

Suggested Schedules

1. Schedule 1 - Initial Capital Contributions: Detailed breakdown of each member's initial capital contributions

2. Schedule 2 - Shareholding Structure: Complete shareholding details including share classes and distribution

3. Schedule 3 - Business Plan: Initial business plan and strategic objectives

4. Schedule 4 - Management Structure Chart: Organizational chart showing management hierarchy and reporting lines

5. Schedule 5 - Reserved Matters: List of decisions requiring special approval or voting thresholds

6. Schedule 6 - Company Assets: Inventory of company's initial assets and properties

7. Appendix A - Specimen Signatures: Authorized signatures of all parties and key personnel

8. Appendix B - Company Licenses: Copies of all business licenses and permits

9. Appendix C - Special Resolutions: Format and procedures for special resolutions

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



























































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Relevant Industries

Manufacturing

Technology

Financial Services

Retail

Agriculture

Mining

Construction

Healthcare

Education

Transportation

Hospitality

Real Estate

Professional Services

Energy

Telecommunications

Relevant Teams

Legal

Corporate Secretariat

Compliance

Finance

Risk Management

Corporate Governance

Business Development

Operations

Executive Leadership

Investment

Relevant Roles

Chief Executive Officer

Managing Director

Chief Legal Officer

Corporate Secretary

Chief Financial Officer

Board Director

Commissioner

General Counsel

Legal Manager

Compliance Officer

Corporate Governance Officer

Investment Manager

Operations Director

Business Development Director

Risk 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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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