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Company Agreement for Saudi Arabia

Company Agreement Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that establishes the framework for company operations, shareholder relationships, and corporate governance. This agreement complies with the Saudi Companies Law of 2015 and related regulations, incorporating Shariah principles where applicable. It details capital structure, management arrangements, shareholder rights and obligations, profit distribution mechanisms, and dispute resolution procedures. The document serves as the primary agreement between shareholders and provides the operational blueprint for the company while ensuring compliance with local regulatory requirements.

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What is a Company Agreement?

The Company Agreement is a fundamental document required for establishing and operating a company in Saudi Arabia. It serves as the cornerstone document that defines the relationship between shareholders and sets out the company's operational framework. This agreement must comply with the Saudi Companies Law of 2015, related regulations, and Shariah principles where applicable. It is typically used when establishing a new company, restructuring an existing one, or when new shareholders join. The document covers crucial aspects including capital structure, management arrangements, shareholder rights and obligations, profit distribution, and dispute resolution mechanisms. It needs to be authenticated by the relevant authorities and may require additional approvals depending on the business sector and whether foreign investment is involved.

What sections should be included in a Company Agreement?

1. Parties: Identification of all shareholders/partners with full legal names, addresses, and national ID/CR numbers

2. Background: Context of the agreement and purpose of establishing the company

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

4. Company Formation: Legal form of company, name, objectives, and head office location

5. Capital and Shares: Company's capital structure, share values, and distribution among shareholders

6. Share Transfer Restrictions: Rules and procedures for transferring shares, including pre-emptive rights

7. Management Structure: Composition of board/managers, appointment process, powers, and responsibilities

8. Shareholders Meetings: Procedures for general and extraordinary meetings, voting rights, and quorum requirements

9. Financial Matters: Financial year, accounts, auditing requirements, and distribution of profits

10. Reserved Matters: Decisions requiring special approval from shareholders or board

11. Non-Competition: Restrictions on competitive activities by shareholders

12. Confidentiality: Protection of company and shareholder confidential information

13. Term and Termination: Duration of agreement and grounds for termination

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

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

What sections are optional to include in a Company Agreement?

1. Shariah Compliance: Specific provisions ensuring compliance with Islamic law principles - required if company engages in financial services or specific regulated activities

2. Intellectual Property: Provisions regarding ownership and use of IP - include if company has significant IP assets

3. Employee Share Scheme: Structure and rules for employee share ownership - include if company plans to offer shares to employees

4. Tag Along/Drag Along Rights: Special share transfer provisions - include for companies with potential future sale/exit plans

5. Foreign Investment Provisions: Special provisions required for foreign investors - include if there are foreign shareholders

6. Digital Assets and Technology: Provisions regarding digital assets and technology use - include for technology-focused companies

7. Environmental Compliance: Environmental protection obligations - include for industries with environmental impact

What schedules should be included in a Company Agreement?

1. Schedule 1: Details of Shareholders: Complete details of all shareholders including contact information and shareholding percentages

2. Schedule 2: Share Capital and Distribution: Detailed breakdown of share capital, classes of shares, and distribution

3. Schedule 3: Business Plan: Initial business plan and operational strategy

4. Schedule 4: Company's Articles of Association: Full articles of association complying with Saudi Companies Law

5. Schedule 5: Reserved Matters List: Comprehensive list of matters requiring special approval

6. Schedule 6: Initial Directors/Managers: Details of initial board members or managers with their powers

7. Schedule 7: Intellectual Property Rights: List of company's intellectual property assets if applicable

8. Appendix A: Key Performance Indicators: Agreed performance metrics for management evaluation

9. Appendix B: Shareholder Loans Terms: Terms and conditions of any shareholder loans if applicable

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

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions















































Clauses







































Relevant Industries

Manufacturing

Technology

Financial Services

Healthcare

Real Estate

Retail

Professional Services

Construction

Energy

Tourism

Education

Transportation

Agriculture

Mining

Entertainment

Relevant Teams

Legal

Compliance

Corporate Governance

Finance

Board Secretariat

Risk Management

Corporate Affairs

Shareholder Relations

Investment

Business Development

Relevant Roles

Chief Executive Officer

Chief Legal Officer

General Counsel

Corporate Secretary

Chief Financial Officer

Legal Director

Compliance Officer

Corporate Governance Manager

Board Director

Managing Director

Shareholder Relations Manager

Investment Manager

Business Development Director

Risk Manager

Company Registrar

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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