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The Joint Venture Profit Sharing Agreement is a crucial document used when two or more parties wish to establish a formal business collaboration in Indonesia while maintaining their separate legal identities. This agreement type is particularly relevant in the Indonesian context due to specific foreign investment regulations and local partnership requirements in various sectors. The document provides a comprehensive framework for the joint venture's operation, covering everything from initial capital contributions to profit distribution mechanisms, while ensuring compliance with Indonesian laws such as the Investment Law (Law No. 25 of 2007) and Company Law (Law No. 40 of 2007). It is commonly used when foreign investors seek to enter the Indonesian market, when local companies want to combine resources for specific projects, or when technical expertise needs to be combined with local market knowledge. The agreement addresses critical aspects such as ownership restrictions, governance structures, and regulatory compliance while providing clear mechanisms for profit sharing and dispute resolution.

1. Parties: Identification of the joint venture partners, including their complete legal names, registration numbers, and registered addresses

2. Background: Context of the joint venture relationship, including the business objectives and each party's expertise/contribution

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules for interpreting the agreement

4. Joint Venture Formation: Details of the joint venture entity's formation, including legal structure, name, and registration requirements

5. Capital Contribution: Specification of initial and subsequent capital contributions from each party, including valuation of non-cash contributions

6. Ownership and Shareholding: Distribution of ownership interests and shareholding structure, complying with Indonesian foreign ownership restrictions

7. Profit Sharing Mechanism: Detailed framework for calculating, distributing, and reinvesting profits

8. Management and Control: Governance structure, including board composition, voting rights, and decision-making processes

9. Rights and Obligations: Specific rights and responsibilities of each party in operating the joint venture

10. Business Operations: Operational framework including business plan, budgeting, and reporting requirements

11. Intellectual Property Rights: Ownership and usage rights of IP brought into or developed within the joint venture

12. Confidentiality: Protection of confidential information and trade secrets

13. Term and Termination: Duration of the agreement and circumstances allowing for termination

14. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law provisions

15. General Provisions: Standard clauses including notices, amendments, entire agreement, and severability