The Commercial Management Agreement is essential for businesses in Indonesia seeking to engage professional management services while ensuring compliance with local regulations. This document is particularly relevant when a company wishes to outsource management functions to specialized service providers or when foreign expertise is needed while maintaining compliance with Indonesian investment laws. The agreement covers crucial aspects such as management scope, operational control, performance metrics, fee structures, and regulatory compliance, while adhering to Indonesian legal requirements including Law No. 25 of 2007 on Investment and Law No. 40 of 2007 on Limited Liability Companies. It's commonly used in various business contexts, from property management to facility operations, and must be drafted in both Indonesian and English languages as per Law No. 24 of 2009.
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1. Parties: Identification of the parties entering into the agreement - the company owner and the management service provider
2. Background: Context of the agreement, including brief description of the business and purpose of the management arrangement
3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation
4. Appointment and Scope: Formal appointment of the manager and detailed scope of management services to be provided
5. Term and Renewal: Duration of the agreement and conditions for renewal or extension
6. Manager's Rights and Obligations: Detailed responsibilities and authority of the management company
7. Company's Rights and Obligations: Responsibilities and obligations of the business owner
8. Fees and Payment Terms: Management fees, payment schedule, expenses, and other financial terms
9. Performance Standards: Required service levels and performance metrics
10. Reporting and Accountability: Required reports, frequency of reporting, and accountability measures
11. Compliance and Regulatory Matters: Obligations regarding Indonesian laws, regulations, and permits
12. Confidentiality: Protection of confidential information and trade secrets
13. Intellectual Property: Ownership and usage rights of intellectual property
14. Termination: Grounds for termination and termination procedures
15. Post-Termination Obligations: Obligations and procedures following termination
16. Liability and Indemnification: Limitation of liability and mutual indemnification provisions
17. Force Majeure: Provisions for unforeseen circumstances and force majeure events
18. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law
19. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement
1. Non-Competition: Restrictions on competitive activities - include when the manager might have access to sensitive market information
2. Insurance: Insurance requirements - include when specific insurance coverage is necessary for the services
3. Staff and Employment: Terms regarding employment and staff management - include when the agreement involves personnel management
4. Environmental Compliance: Environmental obligations - include for industries with environmental impact
5. Technology and Systems: Terms regarding use and maintenance of technology systems - include when IT systems are part of managed services
6. Asset Management: Terms regarding management of physical assets - include when physical asset management is part of scope
7. Quality Control: Specific quality control requirements - include for services requiring strict quality standards
8. Business Continuity: Business continuity and disaster recovery requirements - include for critical business operations
1. Schedule 1 - Scope of Services: Detailed description of management services to be provided
2. Schedule 2 - Fee Structure: Detailed breakdown of management fees, including base fees, performance fees, and expenses
3. Schedule 3 - Key Performance Indicators: Specific performance metrics and measurement criteria
4. Schedule 4 - Reporting Requirements: Format and content requirements for regular reports
5. Schedule 5 - Key Personnel: List of key management personnel and their roles
6. Schedule 6 - Operating Procedures: Detailed operating procedures and protocols
7. Appendix A - Power of Attorney: If required, formal authorization of management powers
8. Appendix B - Company Assets: Inventory of assets under management
9. Appendix C - Required Licenses and Permits: List of necessary regulatory approvals and licenses
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