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50 50 Shareholder Agreement

50 50 Shareholder Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

50 50 Shareholder Agreement

"I need a 50-50 Shareholder Agreement under UAE law for a technology startup between my software development company and a local UAE investor, with particular emphasis on intellectual property protection and deadlock resolution mechanisms."

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Document background
This 50-50 Shareholder Agreement is essential for businesses in the UAE where two parties seek to establish an equal partnership structure. It is particularly relevant when forming new joint ventures or restructuring existing businesses under UAE law. The document addresses the specific requirements of UAE corporate law while providing comprehensive coverage of shareholder rights, corporate governance, and business operations. It includes crucial provisions for deadlock resolution, which is especially important in equal ownership structures, and ensures compliance with UAE Federal Commercial Companies Law No. 2 of 2015 (as amended) and related regulations. The agreement is designed to provide clarity on management control, protect both shareholders' interests equally, and establish clear procedures for business operations and potential disputes.
Suggested Sections

1. Parties: Identification of the shareholders and the company, including full legal names and registration details

2. Background: Context of the agreement, company formation details, and purpose of the arrangement

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Share Capital and Shareholding: Details of share capital, shareholding structure, and confirmation of 50-50 split

5. Management and Decision Making: Board composition, appointment rights, meeting procedures, and decision-making thresholds

6. Deadlock Resolution: Procedures for resolving deadlock situations, including mediation and Russian roulette/Texas shoot-out provisions

7. Transfer of Shares: Restrictions on share transfers, pre-emptive rights, and tag-along/drag-along rights

8. Corporate Governance: Governance structure, reporting requirements, and compliance with UAE regulations

9. Reserved Matters: List of decisions requiring unanimous shareholder approval

10. Financial Matters: Capital contributions, dividend policy, and funding requirements

11. Exit Provisions: Mechanisms for shareholder exit, including put and call options

12. Confidentiality: Protection of company and shareholder confidential information

13. Non-Competition and Non-Solicitation: Restrictions on competitive activities and employee solicitation

14. Term and Termination: Duration of agreement and circumstances for termination

15. Governing Law and Dispute Resolution: UAE law as governing law and dispute resolution mechanisms

Optional Sections

1. Shareholder Loans: Terms for shareholder loans if initial or ongoing financing is required from shareholders

2. Intellectual Property Rights: IP ownership and licensing provisions if company operates in technology or IP-intensive sector

3. Local Partner Provisions: Specific provisions if one shareholder is a UAE national acting as local partner

4. Management Employment: Terms for shareholders' employment in management positions if applicable

5. Business Plan and Budget: If specific business plans or budgets are to be incorporated into agreement obligations

6. Anti-Corruption Compliance: Detailed compliance provisions if company operates in regulated sectors or with government contracts

7. Environmental and Social Responsibility: Additional provisions for companies in environmentally sensitive sectors

8. Islamic Finance Compliance: Specific provisions ensuring compliance with Islamic finance principles if required

Suggested Schedules

1. Share Capital and Shareholding Structure: Detailed breakdown of share classes, numbers, and ownership

2. Initial Business Plan: Agreed initial business plan and key performance indicators

3. Reserved Matters List: Comprehensive list of matters requiring unanimous approval

4. Board and Shareholder Meeting Procedures: Detailed procedures for conducting board and shareholder meetings

5. Deed of Adherence: Template deed for new shareholders to accede to the agreement

6. Tag and Drag Along Procedures: Detailed procedures for implementing tag and drag along rights

7. Deadlock Resolution Procedures: Detailed mechanisms for implementing deadlock resolution

8. Company Management Structure: Organization chart and management responsibilities

9. Initial Budget: Agreed initial operating budget

10. Form of Shareholders' Resolutions: Template forms for various shareholder resolutions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Articles of Association
Board
Business
Business Day
Business Plan
Call Option
Chairman
Company
Completion
Confidential Information
Deadlock
Deadlock Notice
Default Event
Default Notice
Director
Drag-along Notice
Drag-along Right
Encumbrance
Event of Default
Fair Market Value
Financial Year
Group
Independent Expert
Initial Business Plan
Intellectual Property Rights
Management
Material Breach
Memorandum of Association
Notice
Parties
Put Option
Related Party Transaction
Reserved Matters
Resolution Period
Restricted Business
Russian Roulette Procedure
Share Capital
Shareholder Loan
Shareholders
Shareholders' Meeting
Shares
Subsidiary
Tag-along Notice
Tag-along Right
Territory
Third Party
Transfer
UAE
Valuation
Working Day
Clauses
Interpretation
Share Capital and Shareholding
Share Transfer Restrictions
Pre-emptive Rights
Tag-Along Rights
Drag-Along Rights
Board Composition
Board Meetings
Shareholder Meetings
Management Rights
Reserved Matters
Deadlock Resolution
Put and Call Options
Business Operations
Financial Matters
Dividend Policy
Additional Funding
Information Rights
Confidentiality
Non-Competition
Non-Solicitation
Anti-Dilution
Related Party Transactions
Intellectual Property
Representations and Warranties
Default
Termination
Exit Mechanisms
Dispute Resolution
Governing Law
Force Majeure
Assignment
Notices
Severability
Entire Agreement
Costs and Expenses
Third Party Rights
Amendments
Compliance with Laws
Relevant Industries

Technology

Real Estate

Manufacturing

Professional Services

Retail

Healthcare

Construction

Financial Services

Hospitality

Education

Logistics

Media and Entertainment

Trading

Consulting

Energy

Relevant Teams

Legal

Corporate Governance

Board of Directors

Executive Leadership

Finance

Compliance

Risk Management

Corporate Affairs

Company Secretariat

Business Development

Relevant Roles

Chief Executive Officer

Managing Director

Board Member

Chief Legal Officer

General Counsel

Corporate Secretary

Chief Financial Officer

Business Development Director

Compliance Officer

Legal Counsel

Investment Director

Corporate Governance Officer

Risk Management Officer

Company Director

Shareholder Representative

Industries
UAE Federal Commercial Companies Law No. 2 of 2015 (as amended): The primary legislation governing company formation, structure, and operation in the UAE. Essential for defining basic shareholder rights, company management, and corporate governance requirements.
UAE Federal Law No. 32 of 2021: The new Commercial Companies Law that allows 100% foreign ownership of UAE mainland companies, affecting ownership structure options and foreign investor rights.
UAE Civil Code (Federal Law No. 5 of 1985): Provides general principles of contract law and obligations that apply to shareholder agreements, including good faith requirements and contract interpretation.
UAE Commercial Transactions Law (Federal Law No. 18 of 1993): Governs commercial transactions and business relationships, relevant for commercial aspects of the shareholder agreement.
UAE Federal Law No. 6 of 2018 on Arbitration: Important for structuring dispute resolution mechanisms in the shareholder agreement, particularly relevant for 50-50 ownership structures where deadlock situations may arise.
UAE Corporate Governance Resolution No. 3 of 2020: Sets out corporate governance rules and best practices that may need to be reflected in the shareholder agreement.
UAE Federal Decree-Law No. 33 of 2021 (Labor Law): Relevant for provisions relating to employment of shareholders in management positions and non-compete clauses.
UAE Anti-Commercial Fraud Law (Federal Law No. 19 of 2016): Important for provisions relating to shareholder conduct and protection of company interests.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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