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The Business Operating Agreement Template is designed for businesses establishing or operating in the United Arab Emirates, providing a comprehensive framework that complies with UAE Federal Law No. 32 of 2021 and related commercial legislation. This document is essential for new company formations, business restructuring, or updating existing operational frameworks in the UAE. It addresses crucial aspects such as ownership structure, management responsibilities, capital requirements, profit distribution, and governance mechanisms, while incorporating specific UAE legal requirements including local ownership provisions where applicable. The template is adaptable for both mainland and free zone companies, considering various business structures permitted under UAE law, and includes provisions for Shariah compliance where needed. It serves as a foundational document that can be customized based on specific business needs while maintaining alignment with UAE legal requirements and business practices.

1. Parties: Identification of all members/partners, including full legal names, addresses, and ownership percentages

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

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

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

5. Business Purpose and Powers: Detailed description of permitted business activities and company powers

6. Principal Place of Business: Official address and requirements for changing location

7. Term and Dissolution: Duration of the company and conditions for dissolution

8. Capital Contributions: Initial and additional capital contributions, valuation of non-cash contributions

9. Ownership Interests: Classification of interests, rights, and transfer restrictions

10. Management Structure: Management roles, appointment process, and decision-making authority

11. Meetings and Voting: Procedures for member meetings and voting requirements

12. Financial Affairs: Accounting practices, fiscal year, banking, and financial management

13. Profit and Loss Distribution: Formula and timing for distributing profits and losses

14. Tax Matters: Tax compliance and reporting responsibilities

15. Books and Records: Record-keeping requirements and access rights

16. Confidentiality: Protection of company and member confidential information

17. Dispute Resolution: Procedures for resolving disputes including jurisdiction and applicable law

18. General Provisions: Miscellaneous legal provisions including notices, amendments, and severability