Document background
The Preference Shares Agreement is a critical document used when UAE companies seek to raise capital through the issuance of shares with preferential rights, typically offering priority in dividends or capital returns over ordinary shares. This agreement, governed by UAE law and regulations, particularly the Commercial Companies Law (Federal Law No. 2 of 2015), establishes the complete framework for preference shares, including dividend rights, voting powers, conversion or redemption terms, and protective provisions. It's commonly utilized when companies need to attract investors while maintaining existing control structures, or when creating structured investment vehicles. The document must carefully balance UAE corporate law requirements, any applicable SCA regulations, and market expectations, while ensuring enforceability under local jurisdiction.
