Entity Operating Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Entity Operating Agreement

"I need an Entity Operating Agreement for a UAE-based technology startup with three founding members and provisions for future venture capital investment, including detailed sections on share vesting, technology IP rights, and management structure for our planned Series A funding in March 2025."

Document background
The Entity Operating Agreement is a crucial document required when establishing or restructuring a business entity in the United Arab Emirates. It serves as the foundational document that governs the relationship between members/shareholders and defines the entity's operational framework. This agreement is particularly important in the UAE context, where it must align with Federal Law No. 32 of 2021 and other relevant regulations, including free zone-specific requirements where applicable. The document typically includes detailed provisions on ownership structure, management responsibilities, capital contributions, profit distribution, transfer restrictions, and dispute resolution mechanisms. The Entity Operating Agreement becomes especially critical when dealing with multiple shareholders, foreign ownership considerations, or complex governance structures, and must be carefully drafted to ensure compliance with both UAE legal requirements and the practical needs of the business operation.
Suggested Sections

1. Parties: Identification of all members/shareholders and the entity itself

2. Background: Context of the agreement and formation of the entity

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Formation and Purpose: Details of entity formation, business purpose, and term of existence

5. Capital Contributions: Initial and additional capital contributions, capital accounts management

6. Membership Interests: Classes of interests, rights and obligations of members

7. Management Structure: Management appointments, powers, duties, and decision-making processes

8. Meetings and Voting: Procedures for member and management meetings, voting rights and thresholds

9. Financial Affairs: Accounting practices, fiscal year, banking, financial statements

10. Distributions: Profit sharing, distribution policies and restrictions

11. Transfer Restrictions: Limitations on transfer of interests, right of first refusal procedures

12. Withdrawal and Removal: Process for member withdrawal or removal, consequences

13. Dissolution and Liquidation: Events triggering dissolution, liquidation procedures

14. Confidentiality: Protection of company and member confidential information

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

Optional Sections

1. Tag-Along Rights: Include when minority shareholder protection is desired

2. Drag-Along Rights: Include when majority shareholders want exit flexibility

3. Non-Compete and Non-Solicitation: Include when protecting business interests from member competition is crucial

4. Islamic Finance Compliance: Include when entity operations need to comply with Shariah principles

5. Free Zone Specific Provisions: Include when entity is established in a UAE free zone

6. Intellectual Property Rights: Include when IP is significant to business operations

7. Emergency Funding Provisions: Include when additional funding needs are anticipated

8. Key Person Insurance: Include when specific members are crucial to business operations

Suggested Schedules

1. Schedule 1 - Member Information: Details of all members including contact information and initial capital contributions

2. Schedule 2 - Business Plan: Initial business plan and strategic objectives

3. Schedule 3 - Initial Officers: List of initial officers and their roles

4. Schedule 4 - Reserved Matters: List of decisions requiring special approval thresholds

5. Schedule 5 - Deed of Adherence: Template for new members joining the entity

6. Schedule 6 - Property Schedule: List of initial company assets and property

7. Schedule 7 - Valuation Methodology: Agreed methods for valuing membership interests

8. Appendix A - Form of Transfer Notice: Template for notifying intent to transfer interests

9. Appendix B - Management Structure Chart: Organizational chart showing management hierarchy

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

Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Technology

Real Estate

Manufacturing

Trading

Professional Services

Healthcare

Retail

Hospitality

Construction

Logistics

Media and Entertainment

Education

Energy

Consulting

Relevant Teams

Legal

Corporate Governance

Compliance

Finance

Executive Leadership

Corporate Secretariat

Risk Management

Operations

Board Secretariat

Shareholder Relations

Relevant Roles

Chief Executive Officer

Chief Legal Officer

General Counsel

Corporate Secretary

Chief Financial Officer

Managing Director

Board Member

Legal Director

Compliance Officer

Corporate Governance Officer

Senior Legal Counsel

Company Secretary

Operations Director

Managing Partner

Shareholder Relations Manager

Industries
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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