In the business world, business actors sometimes need to collaborate with other business actors. This cooperation is usually carried out with the aim of business expansion, complementing technology needs that are not owned, saving the company from bankruptcy, to cover the shortage of production costs / running a business. In Indonesia itself, there are many types of business cooperation, such as mergers, consolidations, franchises, and joint ventures. So this time, Kontrak Hukum will discuss what a joint venture is and what the applicable legal provisions are. To find out the answer, let’s see the following discussion until the end! Joint Venture or also known as a joint venture is a form of cooperation between one company and another company to achieve certain goals that have been agreed upon for a certain period of time. If desired, the cooperation can also be extended even though the goal has been achieved. Joint ventures are usually carried out with the aim of reducing expenses, reaching a wider market, and innovating the products/goods produced. The cooperation in question can take any form as long as it does not violate legal provisions, such as combining the resources needed and required to achieve the objectives of the cooperation from technology, capital, to expertise owned by each company. However, in Indonesia, joint ventures are mostly carried out in the form of investment between fellow PT PMDN (Domestic Investment) and PT PMA (Foreign Investment). Specifically, provisions regarding joint ventures in terms of investment are regulated in Article 77 of the Job Creation Law, Law No. 25 of 2007 on Investment, Government Regulation No. 83 of 2001, and Presidential Regulation No. 10 of 2021. According to Article 5 of the Investment Law, a joint venture can only be conducted by a business entity in the form of a legal entity while for foreign companies it must be in the form of a limited liability company established under Indonesian law and domiciled in Indonesia. To conduct a joint venture, the parties are required to make an agreement first. The agreement may contain any provisions as long as the clauses contained therein are not contrary to the law and the agreement is executed in good faith. Although the agreement can contain anything as long as the parties wish, specifically for joint venture agreements, it must contain a certain period of time. This is because a joint venture cannot be done forever. In addition, joint venture agreements usually also contain provisions regarding :
- identity of the parties
- Purpose/business model of the joint venture
- Rights and obligations of the parties
- Source of financing
- Management structure and members of the joint venture
- Percentage ownership of shares
- Percentage of profit and loss sharing
- Resources to be used
- Termination period
- Financial statements and joint ventures
- Confidentiality of information
- Cancellation
- Applicable law and how it is resolved in the event of a dispute
- Force majeure
Well, that’s the explanation of joint venture and the applicable legal provisions in Indonesia. For KH Pals who need help drafting a joint venture agreement, Kontrak Hukum can also help KH Pals. KH Pals do not need to worry about using the services of Kontrak Hukum because in addition to being done by legal experts, Kontrak Hukum has been trusted in solving legal problems quickly, easily, and affordably. Furthermore, Sobat KH can visit the Joint Venture Agreement – Bahasa Indonesia page. If you want to consult or have questions about joint ventures or other legal issues, you can also contact Kontrak Hukum at 0821-2555-5332 or via social media Instagram @kontrakhukum.
