A shareholder’s agreement, simply put, is a legal document detailing the terms of engagement between different stakeholders in a company setup Dubai. It is a written document that records the exact ownership stake each partner enjoys within a company setup, along with incumbent obligations. Even non-business-related components, such as management rights, licensing intellectual property, etc. are commonly included in the shareholders’ agreement.
Shareholders’ Agreements Provisions
Shareholders’ agreements usually include some of the following provisions:
Registration and Notarisation
Under the UAE law, the memorandum of association (MOA) of a business setup in Dubai has to be registered and notarised. Shareholders' agreements are extremely common in the UAE, especially in part to a long-standing requirement under the Commercial Companies Law of the United Arab Emirates (Federal Law No. 8 of 1984, now referred to as Companies Law), that dictates that every limited company (LLC) incorporated within the UAE must have one or more national shareholders, with a minimum 51% holding. LLC shareholding agreements (not ‘side agreements’) should also be written and notarised, if possible, so that in the event of a dispute between different stakeholders in a business setup in the UAE, they can be called into action.
Advantages of Entering into a Shareholder’s Agreement
Although the officially-registered MOA’s governing a business hold, there are many additional advantages of having a shareholders’ agreement. Shareholders’ agreements regulate the structure of the business setup in Dubai in more detail, and grant partners flexibility and privacy in documenting their understandings.
Enlisting the help of professionals when undertaking shareholding agreements helps a business setup in Dubai plan their organisational structure in a better way. Book an appointment with one of our trusted consultants at Decisive Zone and get expert help on how to draw an equitable and secure shareholders agreement.
Decisive Zone is a business setup company helping you find the best-suited solution when establishing a company in UAE. Decisive Zone will advise you on the corporate structure and jurisdiction to choose from, while covering all technical, administrative and financial aspects of UAE business setup.