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10 AUGUST 2026 · LEGAL INSIGHT · CORPORATE & TRANSACTIONAL LAW
NDA, SPA, SSA, JVA, and SHA in Indonesian transactions: their functions, critical points, and the corporate actions that determine whether they work
By Adhit Prasetyo, S.H., CLA, Prasetyo Law Office
A single corporate investment may involve several documents serving different functions. An NDA governs the use of information; an SPA or SSA governs how an investor acquires shares; while a JVA or SHA governs the relationship and governance among the parties. The most consequential error is not simply choosing the wrong acronym. It is assuming that signing a contract has, by itself, completed the corporate actions that Indonesian law requires.
This article explains the function of these five instruments in the context of privately held Indonesian companies. Publicly listed companies, specifically regulated sectors, cross-border transactions, and transactions that shift control may require additional approvals, announcements, notifications, or analysis.
Key points
- Document names are not statutory categories. What governs is the substance, the parties, and the legal consequences.
- An SPA or SSA creates transactional obligations, but transferring or issuing shares still requires the correct corporate action.
- JVAs and SHAs can overlap. They cannot be distinguished by signing date alone.
- Contractual rights must be aligned with the articles of association, the resolutions of corporate organs, and mandatory provisions of law.
- For contracts involving Indonesian parties, the Indonesian language requirement must be factored in from the drafting stage.
Start from the transaction outcome, not the document name
Indonesian law generally does not provide specific statutory definitions for the terms non-disclosure agreement, joint venture agreement, share purchase agreement, share subscription agreement, or shareholders’ agreement. The validity and binding force of such contracts rest, among other things, on the requirements for a valid agreement and the principle of good faith under the Indonesian Civil Code. Where an action touches the capital, shares, corporate organs, or articles of association of a company, the contract must also be read together with Law No. 40 of 2007 on Limited Liability Companies (the Company Law).
Two layers must therefore be kept distinct. The first layer comprises the contractual rights and obligations of the parties. The second layer is the effectiveness of the corporate action itself, for example a resolution of the General Meeting of Shareholders, a deed of transfer of title to shares, an amendment to the articles of association, entry in the register of shareholders, and notification to or approval from the Minister. A well drafted contract bridges both layers through conditions precedent, completion documents, and post-completion obligations.
Decision map: which instrument is customarily used?
The table below is a starting map, not a mandatory checklist. The final structure depends on the economic objective, the parties, the articles of association, and sectoral regulation.
| Primary objective | Customary agreement | Steps that cannot be overlooked |
|---|---|---|
| Opening access to sensitive information | NDA, unilateral or mutual | Data room protocol, permitted use limits, adviser access, data security, and the return or destruction of information |
| Establishing a joint venture | JVA and/or SHA | Deed of establishment, articles of association, capital structure, nomination of officers, licensing, and alignment of contractual rights |
| Buying existing shares | SPA | Transfer restrictions, deed of transfer, entry in the register of shareholders, notification to the Minister, and the acquisition regime where control shifts |
| Injecting capital through new shares | SSA | Resolution of the General Meeting of Shareholders, shareholders’ pre-emptive rights, sufficiency of authorized capital, amendment or notification to the Minister |
| Governing the shareholder relationship | SHA | Alignment with the articles of association, the authority of corporate organs, mechanisms for admitting new shareholders, and deadlock resolution |
1. NDA: protecting information, not guaranteeing a transaction
An NDA becomes relevant before one party discloses non-public information for exploratory discussions, negotiation, or due diligence. It may be unilateral, mutual, or multilateral. Its form is determined by the direction in which information flows, not by the name of the transaction.
An NDA is not always the first document, and it does not by itself oblige the parties to proceed with a transaction. Conversely, the absence of an NDA does not automatically mean that all information is free to use. Statutory protections concerning trade secrets, personal data, intellectual property, or professional obligations may still apply. The principal value of an NDA lies in clarifying evidence, scope, permitted purpose, the standard of care, and the consequences of breach.
Clauses that warrant scrutiny
- Definition and permitted purpose. Identify the information protected, how it is marked, and the purposes for which it may be used. A definition drawn too broadly may prove unworkable; one drawn too narrowly leaves gaps.
- Permitted recipients. Address access for affiliates, employees, advisers, financiers, and regulators, including the primary recipient’s responsibility for breaches by those who obtained access through it.
- Exceptions and compelled disclosure. Distinguish information already in the public domain, lawfully held, independently developed, or required to be disclosed by law.
- Security, return, and duration. Set the standard of protection, the handling of copies and backups, incident notification, and how long obligations survive termination of the NDA.
- No licence and no commitment to transact. Confirm that disclosure does not transfer intellectual property rights and does not oblige the parties to sign a definitive transaction, unless otherwise agreed.
2. SPA and SSA: the funds go to different recipients
The most fundamental economic distinction lies in who receives the funds and where the shares come from. Under an SPA, the buyer acquires shares already owned by the seller. Under an SSA, the investor subscribes for new shares issued by the company. This distinction affects pricing, dilution, corporate approvals, and completion documents.
Share Purchase Agreement: buying existing shares
An SPA governs the sale and purchase of shares between a seller and a buyer. The consideration is generally paid to the seller; no new shares are created and the company’s capital does not increase merely because an SPA has been signed. An SPA must nevertheless distinguish between signing and completion. The transfer of title to shares in a privately held company must be effected by a deed of transfer of title, delivered to the company, entered in the register of shareholders, and notified to the Minister in accordance with the Company Law.
The articles of association may require a prior offer to the other shareholders, approval from a corporate organ, or approval from a competent authority. Where the transaction results in a shift of control, the acquisition regime under the Company Law and sectoral provisions may add announcement procedures, protections for creditors and employees, and a notarial deed. For that reason, not every SPA can be completed simply by paying the price and handing over share certificates.
Principal clauses: the shares and rights attaching to them; price and adjustments; conditions precedent; pre-completion covenants; representations and warranties; disclosure; indemnities together with their caps, thresholds, and time limits; completion documents; and post-completion obligations.
Share Subscription Agreement: issuing new shares
An SSA governs an investor’s commitment to contribute funds to the company in exchange for newly issued shares. The funds go to the company, and the percentage holdings of existing shareholders may be diluted. An SSA does not substitute for a resolution of the General Meeting of Shareholders or for the share issuance process prescribed by the Company Law.
An increase in capital requires corporate approval. New shares must in principle first be offered proportionally to shareholders within the same class, unless an exception provided by the Company Law applies. Where the authorized capital must be increased, an amendment to the articles of association and approval from the Minister become relevant. Where the issuance remains within the authorized capital, the resolution and the notification concerning the increase in issued and paid-up capital must still be properly completed.
Principal clauses: the number and class of shares; issue price and share premium; capitalisation before and after the transaction; use of proceeds; conditions precedent; anti-dilution protection; information or governance rights; the completion deadline; and the corporate actions required at completion.
| Aspect | SPA | SSA |
|---|---|---|
| Source of shares | Shares already owned by the seller | New shares issued by the company |
| Recipient of funds | The selling shareholder | The company |
| Effect on capital | No increase arising from the sale and purchase | Issued and paid-up capital increases |
| Dilution | Does not arise from a new share issuance | May occur where existing shareholders do not participate |
| Key corporate steps | Transfer restrictions, deed of transfer, registration, and notification | General Meeting of Shareholders, pre-emptive rights, sufficiency of authorized capital, and approval or notification |
3. JVA and SHA: the distinction is not simply before and after incorporation
The terms JVA and SHA are often used with overlapping scope. A JVA typically focuses on the framework of the joint venture, including the formation of the company, each party’s contributions, the business purpose, funding, governance, and exit. An SHA typically focuses on the shareholder relationship within a particular company. Even so, an SHA may be signed before completion of an investment and take effect only upon completion, and a JVA may continue to apply after the company has been incorporated.
Signing date is therefore not a reliable distinguishing feature. The parties may use a single comprehensive document or separate the JVA and SHA. Where two documents are used, their hierarchy, scope, effective dates, and the mechanism for resolving inconsistencies between them must be stated expressly.
| Dimension | JVA | SHA |
|---|---|---|
| General focus | The framework for forming and operating a joint venture or joint project | The rights, obligations, governance, and exit mechanisms among shareholders |
| Timing | Often before incorporation or investment, but may continue to apply | May be signed before, at, or after completion of the investment |
| Parties | Prospective shareholders, business partners, and in certain circumstances other parties | Shareholders; the company may also be a party where appropriate and permitted |
| Principal risk | Pre-incorporation obligations are not carried through into the corporate documents | Contractual rights conflict with the articles of association or the authority of corporate organs |
Practical implication: a contract does not replace the corporate organs
Under the Indonesian Civil Code, an agreement in principle binds the parties who made it. At the same time, the Company Law allocates authority among the General Meeting of Shareholders, the Board of Directors, and the Board of Commissioners. A shareholder’s right to nominate a director, for instance, does not by itself appoint that person; the appointment is still effected through the General Meeting of Shareholders and the applicable corporate documents. Likewise, a list of decisions requiring shareholder consent must not be drafted as though it removed the authority and responsibility of the Board of Directors under the Company Law.
To narrow the gap between contract and corporate governance, clauses that require effect at the company level should be aligned, so far as permitted, with the articles of association, the resolutions of corporate organs, and internal procedures. Compliance mechanisms should also be specified, including the obligation of new shareholders to sign a deed of adherence, the obligation to exercise voting rights so as to implement the transaction, and remedial steps where a provision cannot be incorporated into the articles of association.
4. Share transfers and exit: distinguish ROFO from ROFR
The terms right of first offer (ROFO) and right of first refusal (ROFR) are frequently used interchangeably, although the mechanisms differ. Under a ROFO, the seller must first offer the shares to the rightholder before seeking an external buyer. Under a ROFR, the rightholder is usually given the opportunity to match a bona fide third-party offer or the terms already agreed with a third party.
The Company Law permits the articles of association to impose an obligation to offer shares first to particular shareholders or to the other shareholders. Because contractual terminology and the mechanism in the articles of association may diverge, the heading of a clause is not enough. The clause must specify the trigger, how the price is determined, the evidence required of a third-party offer, the applicable periods, the standard for matching terms, transfers to affiliates, changes of control at shareholder level, and the obligation of a transferee to be bound by the SHA.
Other exit mechanisms, such as tag-along, drag-along, call options, put options, or deadlock provisions, likewise require operational drafting. The documents must identify who may trigger them, how valuation is carried out, the source of funding, the settlement procedure, any regulatory approvals, and the consequences of failing to perform. Options that rely on the company purchasing its own shares must be tested separately against the provisions on share buy-backs and capital maintenance.
5. Cross-border contracts: language and governing law
The Indonesian language must be used in memoranda of understanding or agreements involving state institutions, Indonesian government agencies, Indonesian private entities, or Indonesian citizens. Where a foreign party is involved, the contract is also written in that party’s national language and/or in English. Presidential Regulation No. 63 of 2019 permits the parties to agree which language version prevails in the event of differing interpretations.
On 2 March 2026, through Decision No. 173/PUU-XXIII/2025, the Constitutional Court rejected a petition challenging the absence of a nullity sanction in Article 31 paragraph (1) of Law No. 24 of 2009. The Court upheld the mandatory character of the Indonesian language requirement but did not read an automatic consequence of nullity into that provision. The prudent approach remains to prepare the Indonesian and foreign language versions in a coordinated manner, with a consistent language clause.
Choosing foreign governing law or an arbitral forum does not displace mandatory provisions applicable to Indonesian companies. The parties must still address the governing law, the forum and seat for dispute resolution, the language of proceedings, notices, enforcement of awards, currency, tax, and the Indonesian corporate documents required.
6. A safer sequence of work
No single sequence applies to every transaction. For an investment involving information review, a share transfer or issuance, and governance arrangements, the following flow may serve as an initial framework:
- Determine the structure and economic outcome. Confirm whether the funds should reach the seller or the company, whether control will shift, and what governance rights the investor requires.
- Protect the exchange of information. Use an NDA and a data room protocol before opening sensitive information, and identify data requiring additional restrictions.
- Document the commercial principles. A term sheet or letter of intent may be used where helpful, with clear markers as to which provisions are binding and which are not.
- Prepare the definitive documents as an integrated set. Use an SPA for existing shares or an SSA for new shares, and a JVA and/or SHA according to the governance agreed.
- Satisfy the conditions precedent. Complete internal approvals, pre-emptive rights, third-party or regulatory consents, funding, and corporate documents before completion.
- Execute completion and the corporate actions. Synchronise payment, the issuance or transfer of shares, the deeds, updates to the register of shareholders, amendments to the articles of association, and approvals or notifications to the Minister.
- Close out post-completion obligations. Update licences, ownership and beneficial ownership data, investment reporting, tax, bank mandates, material contracts, and the relevant internal records.
Conclusion
NDAs, JVAs, SPAs, SSAs, and SHAs are not a package of documents that must always be used together. Each instrument answers a different risk. Choosing correctly begins with the economic and governance outcome sought, which is then translated into contracts, resolutions of corporate organs, deeds, and filings that are consistent with one another.
The greatest risk arises where a contract appears complete but cannot be operationalised at completion, or conflicts with the articles of association and applicable law. A review should therefore cover not only the drafting of clauses, but also the transaction sequence, signing authority, approvals, evidence of satisfaction, and post-completion steps.
Prasetyo Law Office is a Jakarta-based law firm providing integrated legal services to clients across a range of areas, from commercial transactions to cross-sector litigation. With years of experience, we command not only the regulatory dimension but also an understanding of industry dynamics and the character of our clients’ businesses. We provide comprehensive legal advice and strategic solutions to help clients mitigate legal risk comprehensively in every business challenge.
Prasetyo Law Office
Infiniti Office, Indonesia Stock Exchange Building, Tower 1 Level 3 Suite 304
Sudirman Central Business District (SCBD)
Jl. Jenderal Sudirman Kav. 52-53
South Jakarta, DKI Jakarta 12190
Phone: +6221 5890 5002 ext. 105
E-mail: info@prasetyolawoffice.com
Principal sources
- Indonesian Civil Code, in particular Articles 1320, 1337, 1338, and 1340.
- Law No. 40 of 2007 on Limited Liability Companies, as last amended by Law No. 6 of 2023, in particular Article 21, Articles 41 to 43, Articles 55 to 59, Article 75, Article 92, Article 108, and Articles 125 to 131.
- Law No. 6 of 2023 on the Enactment of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation into Law.
- Law No. 24 of 2009 on the Flag, Language, and Emblem of the State, and the National Anthem, in particular Article 31.
- Presidential Regulation No. 63 of 2019 on the Use of the Indonesian Language, in particular Article 26.
- Constitutional Court Decision No. 173/PUU-XXIII/2025, pronounced on 2 March 2026, applying the considerations set out in Decision No. 188/PUU-XXIII/2025 concerning Article 31 paragraph (1) of Law No. 24 of 2009.
- Law No. 30 of 2000 on Trade Secrets.
- Law No. 27 of 2022 on Personal Data Protection.
Disclaimer: This publication is provided for general information and educational purposes based on the regulations and materials available as of 10 August 2026. It does not constitute legal advice or a formal legal opinion and should not be relied upon as the sole basis for any particular transaction, corporate action, or dispute. Indonesian regulations, judicial interpretation, and corporate practice may change. Advice tailored to the specific facts, together with verification of the current requirements, should be obtained before taking any action. Receipt or use of this publication does not create an advocate-client relationship.
