Thursday, May 27, 2010

Shareholder Loan

There are instances where a PT Limited Liability Company operating in Indonesia needs funds from its Shareholder. In this situation you as a Business Lawyer are being required to draft a  certain Shareholder Loan Agreement by your Client. If you are an In House Legal Counsel of such PT Company you may try to draft a first draft of such Shareholder Loan Agreement to be further reviewed by an Outside Lawyer. Click Here!

If there are several shareholders in such PT Company, there must firstly be a Shareholders Meeting  called  by the Board of Directors for a meeting with the agenda to request the shareholders to give such Shareholders Loan to the PT Company, where Minutes of the General Shareholders Meeting will be the legal basis  for the  Shareholders and the PT Company to enter into a Shareholder Agreement. As we understand under the Indonesian Limited Liability Company Law, the PT and its respective Shareholders are being treated respectively as an independent Law Subject in front of the Law.   Thus if the shareholder agreed to provide such Shareholder Loan, such Shareholder who are providing such Shareholder Loan has the right to demand for the repayment of the Shareholder Loan against the PT Company. S corporation shareholder loans: a cautionary tale.: An article from: The Tax Adviser


This Shareholder Loan has the level of subordinate Loan against Loan From a Bank made to such PT Limited Liability Company, meaning that if there is cash-in received by such PT from its business, the repayment has to be  firstly made by the PT  to the Bank and if there is remaining amount after being deducted for the operations of the PT Company such monies is allocated for the repayment to such Shareholder providing such Shareholder Loan to such PT Company.

This repayment to the Shareholder is also made first before dividend are distributed to the Shareholders. This all depends upon the agreement between the shareholders of the PT Company and the Shareholder who is providing such Loan. It is really interesting for a Business Lawyer to draft this Shareholder Loan Agreement since there are legal aspects of Civil Law regulating loan, and  there are Corporation PT Law regulating the corporation aspects of such PT, which have to be observed by the Business Lawyer in drafting the Shareholder Loan Agreement.      

Monday, May 24, 2010

Loan Agreements

If your Client needs some funds from a certain Financier, you may be requested to draft or review a Loan Agreement. In drafting this Loan Agreement there are several legal aspects that you have to draw your attention. You must know the amount of the Loan which your Client requires, the Disbursement of the Loan, and the Repayment of such Loan. In order to secure the Loan the Banks or Financier usually request a certain Independent Business Lawyer to conduct Legal Due Diligence to review several legal aspects that have to be observe to make sure that your Client is eligible to receive the Loan and will ask the purpose of your Client in requesting such Loan.      
Besides Legal Due Diligence, there may also be conducted the Financial Due Diligence for the purpose to review the Business Financial aspect relating to your Client Business. Is the purpose of such Loan for expansion of your Clients Business ? What is the project cash flow projections of your Clients Business.Who is the target market of your Client ? What is the market  share of your Clients selling products. Is your Client conducting business in Manufacturing a certain product ? Or is your Client conducting General Mining Business Operations ?

There are certain Bankers who looks at the reputation of your Clients Business. For instance if the Project is really feasible and your Client based on the Financial Records shows positive cash flows based on a certain Project that had been done by your Client, The Banker may trust your Client and provides a Project Financing arrangements, where the Banker is more focusing on the proven Cash in of the Projects in several projects that had been performed by you Client.   

If your Client has not yet shown Projects being performed, the Bankers may request several Corporate Assets of your Client such as Buildings, Plants, Machines, Heavy Equipments  as collateral  to secure the repayment of the Loan. As a Business Lawyer you need to review all the Legal aspects including the title ownership of such Corporate Assets.

The Bankers may also need to request some pledges upon the shares issued by your Clients Company. As  a Business Lawyer you need to review the Corporate Documents relating to the owner of the shares issued by your Clients Company.  Besides  reviewing the  Loan Agreements you may also need to draft or review  Collateral arrangements including the Fiduciary arrangements and probably may need to conduct checking with the Fiduciary Office relating the registering the Fiduciary Deeds.       

Saturday, May 22, 2010

Business Legal Exposures Beef Restaurant Franchise Arrangements

In doing business you may be interested to enter into a business cooperation with another company who is mastering a certain business ventures that you are interested. For instances if you want to open a steak beef business Restaurant  you need to master all the conditions of the beef meat that you desire to serve in your Restaurant. You need to now the location of the place where your restaurant is going to be open. Is such place strategic or not. Are you intending to open a small or big Restaurant ? Where do you want to purchase such beef. Is it local beef or imported beef. 
Click Here!

If you feel that you want to use a famous beef Restaurant  that is already well known, you may be interested to enter into a Franchise Agreement with such well Known Beef Restaurant.  It really depends whether the owner of such well known brand is willing to allow you to use their brand in your Restaurant. If this is the case than you may need to observe the legal clauses under such Franchise Agreement. What are the rights that you have in using such well known brand, and what are the requirements that you need to comply as requested by the Owner name Brand  of such well Known Restaurant. It may be that the performance image of such Beef Restaurant including the conditions and cleanness of  your Restaurant must meet the standard  performance which is adopted by the Owner of the Well Known Beef Restaurant.

The Hygene and quality of the Foods and services have to be in accordance with the standard quality of Food as determind by the Owner of the Well Known Beef Restaurant. In fulfilling such above quality and standards you may need to redecorate your table, sits, Bathrooms, table cloth as well as the cleanest and standard dress  used by the Person who provide and serve such Beef Steak to  the  Customers and guests of your Restaurant all to be in the cost of you alone.  

The quality of the water may also be important to be observed. Who are the suppliers of the Beef Steak?. It may be that the Owner of the Brand will select the Supplier of such Beef Steak. The condition of the Kitchen as well as the Chef  may also be in accordance with the standard  requirements  as requested by the Owner of the well Known Beef Brand. Since this will be a Franchise arrangements there may be a certain Franchisee fee or Royalties that  you have to pay upfront to the Owner of the Franchise before they allow you to use their Beef Brand Restaurant.

This all depends upon the circumstances  and conditions surrounding the business transaction between you and the Owner of the Beef Brand Restaurant Owner. Well those are some of the business aspects which  have to be jotted down under the Franchise Agreement between you and the Owner of the Well Known Beef Brand Restaurant resulting legal binding contractual arrangements between you and the Beef Brand Owner.   

Writing Business Legal Aspects

Well, as Business Lawyer you like to write legal aspects relating to business in Indonesia.I ndonesia has been developing into a Democracy Society, where transparency and openness is a requirement to be performed by all the stake holders of this Country. Indonesia is an archipelago where there are many islands spread in the equator within the South East Asian Region. After the changing of the ruler of the previous former President Soeharto in the Year 1998, this country became a country in Asia where democracy is adopted. 

Click Here!This transparency also spreads to the Business Sectors, where every person or party who wishes to conduct business in the Indonesian Territory  are given the same and fair chance to be a business player in the field of business. Anti Monopoly Act are being introduced in the Indonesian Law system.Good Corporate Governance are also being socialized in the Indonesian Business Community. During the Indonesian Economic Crisis in the Year 1998, many companies collapse due to the Economic Turbulence Crisis. Restructuring of the Non-Performance Loans had been made to revitalize the financial conditions of the Companies.

During  such period as a Business Lawyer we are experienced in helping our Clients to draft and negotiate the Restructuring Loan Agreements.  There were several  hair cut upon the Loan and rescheduling of the Repayment of the Loans. Now a  days  after the Indonesian Presidential Elections  and Vice President Elections as well as the Parliament elections were conducted, business society is waiting to experienced economic growth and business climate stability in order for the Business Players to start concentrating in pursuing their business.

The impact of the Indonesian  Parliament in controlling the Government is felt to be more of a political arena, where it could in a certain level affect the business condition in Indonesia. However, as a rule thumb of survival everybody needs to continue on their business ventures, where as individuals who are working as employees in Companies also needs stability in the Business Society to enable  them to work in their good quality performances.

In the Governmental Level in Indonesia, transparency and openness are also being required so that public services for the people as a whole including the business players who needs business  licenses and permits are simplified. The coordination between the Government Officials and policies in the Central Level and Regional Level are also required so that no contradictory policies are made which will affect the business investors conducting its business operation in the Regional Level.  

As a Business Lawyer, we are required to communicate and be the bridge for communication between our Business Clients and the Government Officers relating to the legals aspects and procedures involved in the business operations of our Clients. We have to read and observe the rules and policies in the Central Level and the Regional Level particularly to detect whether there occurs overlapping rulings and laws between the Central and such Regional Rules and Policies.    

Well those are some of the Business Legal Aspects that have to be observed and communicated effectively by the Business Lawyers to the Management of the Company where they work if they are In House Legal Counsel, as well as Business Lawyer on their own to their Clients.  

Business Lawyer Here We Come

Yes, it is the time that you act and behave like a professional Business Lawyer. There is professional ethics and manner and proper knowledge that you have to honor if you want to start becoming a Business Lawyer. You must increase your awareness on the Corporate Culture of your Client and Customers. What the Business players need from you is your professional business legal know how to protect their Business interest.You have to be aware of the business climate and business opportunities that your Business Client's desires to achieve their goal. 

You have to guide and give clear legal guidance to your Client on the various legal aspects surrounding the business operations of your Clients. What are the proper rules laws and policies that have to be observe  by your Clients in pursuing its business ventures.  If it relates to corporate matters you have to be sure that the proper corporation actions and approvals with the organization of your Business Client had been taken. The structure of protection in Indonesian manufacturing sector.(Report): An article from: ASEAN Economic Bulletin 

Is your Clients desiring to enter and establish a new venture, or are they eager to participate into a cooperation  venture with other business players who are already operating their business operations in Indonesia.What is the nature of the business that your Clients desires to pursue. Are they also seeking some additional funds to expand their business ventures.Are they in the Hotel Business or are they in the oil and gas sectors. If they are eager to promote their products, what are the rulings relating to importing and distributing the products in Indonesia. 

Are they interested to conduct Coal Mining Operations in Indonesia, or are they just trader who wants to purchase coal from Indonesia. Those are some of the business operations aspects that you as a Business Lawyer have to explore and dig from your prospective Clients.  It is really interesting to be a Business Lawyer. The issue is that whether you want to be an In house Legal in a Corporation who conducts operation in Indonesia or are you interested to be a Lawyer in a Law Firm or you would like to practice as a Business Lawyer on your own. This all depends upon the circumstances and situation of you as a Lawyer. If you just graduated from a University in Indonesia, you might as well work in a Law Firm or apply to be an In-house Legal Counsel in a Company operating in Indonesia.

Everything needs learning and process of practicing your legal know how before you can become a professional Business Lawyer. This all depends upon your motivation and dreams in your life expectation and journey. Nothing is free in this world. So join the community of the Business Lawyer in Indonesia. Good Luck and success.



Drilling Rig

Drilling Rig
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