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There are two principal legal documents that set out the terms of a joint venture in Indonesia.
First, the joint venture agreement entered into by the joint venture partners. The joint venture agreement is in essence a private agreement documenting the relationship between the joint venture partners, containing the rights and obligations of the shareholders of the company (the joint venture partners) and regulates the relationship between these shareholders from before the company was established.
Second, the Deed of Establishment contains the articles of association of the joint venture as well as a list of the members of the Board of Directors ("BOD") and the Board of Commissioners ("BOC") for a PT, or a list of the partners for a partnership.
Pursuant to Article 7(1) of the Company Law, the Deed of Establishment of a PT must be executed in notarial deed form and in the Indonesian language. The constitution of the joint venture vehicle, embodied in its articles of association in the Deed of Establishment, interacts with the joint venture agreement by formalizing and setting a legal structure for the relationship established in the private joint venture agreement.
Joint venture agreements also typically include a provision regarding which agreement prevails in the event of a conflict between the joint venture agreement and the articles of association. In most cases, if not all, the joint venture agreement prevails over the articles of association.
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Excerpted fromLegal 500 Joint Ventures 2025, published by Legalease Ltd.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
