Operating Agreement For Incorporation Template for United Arab Emirates

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Key Requirements PROMPT example:

Operating Agreement For Incorporation

"I need an Operating Agreement for Incorporation for a UAE mainland technology consulting company with three international shareholders (from UK, India, and Singapore) and a 51% UAE national partner, planning to start operations in March 2025."

Document background
The Operating Agreement For Incorporation is a crucial document required when establishing a company in the United Arab Emirates, whether in the mainland or free zones. It serves as the primary governance document that defines the company's structure, operations, and stakeholder relationships in compliance with UAE Federal Law No. 32 of 2021. This agreement becomes particularly important given the UAE's specific requirements for company formation, including considerations for foreign ownership, capital requirements, and corporate governance. It typically includes detailed provisions for shareholding structure, management responsibilities, profit distribution, and dispute resolution mechanisms, while ensuring alignment with both federal and emirate-specific regulations. The document must be carefully drafted to accommodate future business growth while maintaining compliance with UAE corporate law requirements.
Suggested Sections

1. Parties: Identification of all members/shareholders forming the company, including full legal names, addresses, and nationality

2. Background: Context of the company formation, business purpose, and intention of the parties

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. Formation and Name: Details of company formation, trade name, and legal status

5. Principal Office and Duration: Company's registered address and duration (fixed term or perpetual)

6. Purpose and Powers: Company's business activities and powers to conduct operations

7. Capital Structure: Details of capital contribution, shares/units allocation, and payment terms

8. Management Structure: Governance framework, manager appointments, and decision-making processes

9. Members' Rights and Obligations: Rights, duties, and responsibilities of members

10. Meetings and Voting: Procedures for member meetings, voting rights, and quorum requirements

11. Financial Affairs: Fiscal year, accounting practices, and financial reporting requirements

12. Profit and Loss Distribution: Method of distributing profits and losses among members

13. Transfer of Interests: Rules governing transfer of ownership interests and restrictions

14. Dissolution and Liquidation: Procedures for company dissolution and asset distribution

15. Governing Law and Jurisdiction: Specification of UAE law application and jurisdiction

Optional Sections

1. Non-Competition and Confidentiality: Restrictions on competitive activities and protection of company information, used when specific intellectual property or trade secrets need protection

2. Tag-Along and Drag-Along Rights: Special provisions for share transfers in case of sale to third parties, typically used in larger companies with multiple shareholders

3. Deadlock Resolution: Procedures for resolving management deadlocks, important for companies with equal ownership splits

4. Pre-emptive Rights: Rights of existing members to maintain ownership percentage when new shares are issued

5. Put and Call Options: Rights to force purchase or sale of shares under specific circumstances

6. Islamic Finance Compliance: Specific provisions ensuring compliance with Sharia principles, if required

7. Employee Profit Sharing: Framework for employee participation in company profits, if applicable

8. Emiratisation Provisions: Specific commitments regarding UAE national employment, if applicable to the business sector

Suggested Schedules

1. Schedule 1 - Members' Information: Detailed information about members including contact details and initial capital contributions

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

3. Schedule 3 - Share Capital Structure: Detailed breakdown of share classes, rights, and ownership percentages

4. Schedule 4 - Management Structure: Organizational chart and management responsibilities

5. Schedule 5 - Reserved Matters: List of decisions requiring special approval or unanimous consent

6. Schedule 6 - Initial Assets: List of assets initially transferred to the company

7. Appendix A - Form of Share Certificate: Template for share certificates

8. Appendix B - Key Performance Indicators: Metrics for evaluating company and management performance

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

Technology

Real Estate

Manufacturing

Trading

Professional Services

Healthcare

Education

Financial Services

Retail

Hospitality

Construction

Media and Entertainment

Logistics

Energy

Consulting

Relevant Teams

Legal

Corporate Governance

Executive Leadership

Finance

Compliance

Risk Management

Corporate Secretary Office

Business Development

Operations

Investment

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Corporate Lawyer

Company Secretary

Chief Financial Officer

Managing Director

Board Member

Legal Counsel

Corporate Governance Officer

Compliance Manager

Business Development Director

Investment Manager

Shareholder Relations Manager

Risk Management Officer

Operations Director

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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