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Business Partner Buy Sell Agreement for United Arab Emirates

Business Partner Buy Sell Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions for the purchase and sale of business ownership interests between partners or shareholders. This document complies with UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and related regulations, providing a structured framework for ownership transitions triggered by specific events such as death, disability, retirement, or voluntary exit. It includes detailed provisions for valuation methodology, payment terms, and dispute resolution mechanisms while incorporating UAE-specific requirements for share transfers and corporate governance.

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What is a Business Partner Buy Sell Agreement?

The Business Partner Buy-Sell Agreement serves as a critical business succession planning tool in the UAE market, providing a legally binding framework for managing ownership transitions in various scenarios. This document is essential for businesses operating under UAE jurisdiction, whether in mainland UAE or free zones, and must comply with Federal Law No. 32 of 2021 and related regulations. It becomes particularly important when establishing clear protocols for ownership changes triggered by events such as partner retirement, death, disability, or voluntary exit. The agreement typically includes comprehensive provisions for business valuation, payment structures, transfer restrictions, and dispute resolution mechanisms, all tailored to align with UAE legal requirements and business practices. It's commonly used by both family businesses and professional partnerships to ensure business continuity and protect all stakeholders' interests while maintaining compliance with local laws and regulations.

What sections should be included in a Business Partner Buy Sell Agreement?

1. Parties: Identification of all partners/shareholders and their current ownership percentages

2. Background: Context of the agreement, including company details and purpose of the buy-sell arrangement

3. Definitions: Key terms used throughout the agreement, including technical and legal definitions specific to UAE law

4. Transfer Restrictions: General restrictions on transfer of ownership interests and exceptions

5. Triggering Events: Events that activate the buy-sell provisions (death, disability, retirement, termination, etc.)

6. Valuation Method: Agreed methodology for determining business value when triggered

7. Purchase Price and Payment Terms: Structure and timing of payments, including any installment provisions

8. Right of First Refusal: Process and timeframes for existing partners to purchase available shares

9. Funding Mechanism: Sources of funding for purchase, including insurance policies if applicable

10. Tag-Along and Drag-Along Rights: Rights of minority shareholders in case of third-party offers

11. Dispute Resolution: Process for resolving disagreements, including UAE court jurisdiction and arbitration provisions

12. Governing Law: Explicit statement of UAE law application and relevant jurisdictional details

13. Notices: Communication requirements and acceptable methods of notice delivery

14. Amendments: Process for modifying the agreement with required approvals

What sections are optional to include in a Business Partner Buy Sell Agreement?

1. Sharia Compliance: Additional provisions ensuring compliance with Islamic law principles, particularly relevant for family businesses or Islamic banking arrangements

2. Free Zone Provisions: Specific provisions for businesses operating in UAE free zones, including relevant authority approvals

3. Cross-Border Considerations: Additional provisions for partners or operations involving multiple jurisdictions

4. Family Business Provisions: Specific provisions for family-owned businesses including succession planning

5. Non-Competition and Confidentiality: Restrictions on competing activities and handling of confidential information post-exit

6. Tax Considerations: Provisions addressing UAE corporate tax implications and international tax considerations

7. Digital Asset Transfer: Provisions for transfer of digital assets and intellectual property rights

8. Force Majeure: Provisions for unforeseen circumstances affecting the agreement execution

What schedules should be included in a Business Partner Buy Sell Agreement?

1. Schedule 1: Current Ownership Structure: Detailed breakdown of current ownership percentages and share classes

2. Schedule 2: Valuation Formula: Detailed methodology and calculations for business valuation

3. Schedule 3: Insurance Policies: Details of life insurance or key person insurance policies funding the agreement

4. Schedule 4: Company Information: Corporate documents, licenses, and regulatory approvals

5. Schedule 5: Calculation of Purchase Price: Detailed methodology for calculating the purchase price including adjustments

6. Appendix A: Required Notice Forms: Template forms for various notices required under the agreement

7. Appendix B: Valuation Expert Qualifications: Criteria and qualifications for independent valuators

8. Appendix C: Transfer Documentation: Template share transfer forms and required governmental documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions





















































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Relevant Industries

Professional Services

Manufacturing

Retail

Technology

Healthcare

Real Estate

Construction

Financial Services

Hospitality

Trading

Logistics

Consulting

Family Businesses

Small and Medium Enterprises

Free Zone Companies

Relevant Teams

Legal

Finance

Corporate Governance

Risk Management

Compliance

Executive Leadership

Board of Directors

Corporate Secretariat

Business Development

Strategy

Relevant Roles

CEO

Managing Director

Business Owner

Partner

Shareholder

General Counsel

Legal Director

Chief Financial Officer

Corporate Secretary

Risk Manager

Business Development Director

Operations Director

Family Office Manager

Compliance Officer

Board Member

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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