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Partnership Buy Sell Agreement for United Arab Emirates

Partnership Buy Sell Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions for the transfer of partnership interests in various scenarios such as death, disability, retirement, or voluntary exit of a partner. The document ensures business continuity by providing clear mechanisms for valuation, purchase, and transfer of partnership interests while complying with UAE Commercial Companies Law and relevant federal regulations. It includes specific provisions for funding arrangements, payment terms, and dispute resolution methods aligned with UAE legal requirements and business practices.

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What is a Partnership Buy Sell Agreement?

The Partnership Buy-Sell Agreement serves as a crucial business continuity tool for partnerships operating in the United Arab Emirates, providing a clear framework for handling ownership transitions. This document becomes essential when establishing or maintaining a partnership structure under UAE law, as it addresses critical scenarios such as partner exits, deaths, or disability, while ensuring compliance with Federal Law No. 32 of 2021 (Commercial Companies Law) and other relevant UAE regulations. The agreement typically includes comprehensive provisions for valuation methodologies, funding mechanisms, transfer procedures, and dispute resolution processes, all structured to align with UAE legal requirements and business practices. It's particularly vital for protecting both the continuing partners and departing partners' interests while maintaining the stability and operational continuity of the business.

What sections should be included in a Partnership Buy Sell Agreement?

1. Parties: Identification of all partners and the partnership entity, including full legal names, addresses, and registration details

2. Background: Context of the agreement, partnership history, and purpose of the buy-sell arrangement

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

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

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

6. Purchase Price and Valuation: Methods for determining the purchase price of partnership interests

7. Payment Terms: Structure and timing of payments for purchased partnership interests

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

9. Mandatory Purchase Events: Circumstances requiring mandatory purchase of partnership interests

10. Funding Mechanism: Sources of funding for purchases, including insurance policies if applicable

11. Tax Provisions: Treatment of tax implications under UAE law for partner buyouts

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

13. Dispute Resolution: Procedures for resolving disputes, including arbitration provisions

14. Notices: Process for formal communications between parties

15. General Provisions: Standard boilerplate clauses including severability, entire agreement, amendments

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

1. Life Insurance Provisions: Details of life insurance policies funding buy-out obligations, used when insurance funding is chosen

2. Disability Provisions: Specific provisions for handling partner disability, included when disability insurance is part of the funding mechanism

3. Family Transfer Exceptions: Special provisions for transfers to family members, relevant for family businesses

4. Sharia Compliance: Additional provisions ensuring compliance with Sharia law, included when partners require Islamic law compliance

5. Free Zone Provisions: Special provisions applicable to partnerships in UAE free zones, included for free zone entities

6. Cross-Purchase vs. Entity Purchase: Specific structure for purchase arrangements, included when flexibility in purchase method is desired

7. Tag-Along Rights: Provisions protecting minority partners, included for partnerships with significant ownership disparities

8. Drag-Along Rights: Provisions allowing majority partners to force sale participation, included for partnerships with potential exit strategies

What schedules should be included in a Partnership Buy Sell Agreement?

1. Schedule A - Current Partnership Interests: Details of current ownership percentages and capital accounts

2. Schedule B - Valuation Formula: Detailed methodology for calculating partnership interest values

3. Schedule C - Life Insurance Policies: List of insurance policies and coverage details

4. Schedule D - Certificate of Value: Current agreed value of partnership interests if fixed-price approach is used

5. Schedule E - Business Licenses: Copies of all relevant UAE business licenses and registrations

6. Appendix 1 - Valuation Examples: Sample calculations demonstrating the valuation methodology

7. Appendix 2 - Required Notices: Forms and templates for required notices under the agreement

8. Appendix 3 - Partner Contact Information: Detailed contact information for all partners and authorized representatives

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

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Cost

Free to use
Relevant legal definitions
























































Clauses







































Relevant Industries

Professional Services

Trading

Real Estate

Manufacturing

Healthcare

Construction

Retail

Technology

Consulting

Family Businesses

Hospitality

Financial Services

Relevant Teams

Legal

Finance

Corporate Governance

Risk Management

Compliance

Business Development

Operations

Executive Leadership

Corporate Secretariat

Relevant Roles

Managing Partner

Chief Executive Officer

Chief Financial Officer

General Counsel

Legal Director

Business Development Director

Partnership Manager

Risk Management Officer

Compliance Officer

Corporate Secretary

Finance Manager

Operations Director

Managing Director

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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