When starting a business, it’s important to establish a founder agreement to ensure that everyone is on the same page and to avoid potential conflicts down the line. In Indonesia, a founder agreement is a legal document that outlines the roles and responsibilities of each founder, as well as how the company will be managed and how any disputes will be resolved.
One key element of a founder agreement is the division of equity between founders. This can be a tricky issue, as each founder may bring different skills and resources to the table. In Indonesia, companies are typically structured as Perseroan Terbatas (PT), which is similar to a limited liability company (LLC) in the United States. PTs can have up to 50 shareholders, and the founders must agree on how equity will be divided among them.
Another important aspect of a founder agreement is the allocation of decision-making power. Founders should agree on who will be responsible for key decisions such as hiring, firing, and major investments. In Indonesia, the Articles of Association (AoA) outline the powers and duties of the board of directors and the board of commissioners, which are responsible for overseeing the company’s operations. Founders should ensure that the AoA aligns with their founder agreement.
A founder agreement should also include provisions for dispute resolution. Disagreements can arise between founders, and it’s important to have a mechanism in place for resolving them. In Indonesia, arbitration is a common method of resolving disputes. Founders should agree on the terms of arbitration, including who will serve as the arbitrator and how the decision will be enforced.
Finally, a founder agreement should address the exit strategy for each founder. Founders may eventually want to sell their shares in the company or leave the company altogether. The agreement should outline the terms of any buyout or sale of shares and specify how the company will be valued.
In conclusion, a founder agreement is a crucial document for any startup in Indonesia. It outlines the roles and responsibilities of each founder, the division of equity, decision-making power, dispute resolution, and exit strategy. By drafting a clear and comprehensive founder agreement, founders can avoid potential conflicts and set their startup up for success.