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The Equity Partnership Agreement is a fundamental document for establishing formal business partnerships in Saudi Arabia. It is typically used when two or more parties wish to enter into a business relationship involving shared ownership, management responsibilities, and profit/loss sharing. The agreement must comply with Saudi Companies Law 2015 and Sharia principles, making it distinct from partnership agreements in non-Islamic jurisdictions. This document is essential for documenting partner capital contributions, establishing governance structures, defining profit distribution mechanisms, and setting out exit provisions. It's particularly important for foreign investors entering the Saudi market, as it must address specific local requirements such as foreign investment restrictions and Saudization policies.

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

2. Background: Context of the partnership formation, business objectives, and any relevant historical relationship between the parties

3. Definitions: Key terms used throughout the agreement, including technical, financial, and legal terminology

4. Partnership Structure: Legal form of partnership, registered office, and duration of the partnership

5. Capital Contributions: Details of initial and subsequent capital contributions, valuation of non-cash contributions, and capital maintenance requirements

6. Ownership and Shares: Distribution of ownership, classes of shares, and rights attached to different share classes

7. Management and Control: Governance structure, appointment of managers, decision-making processes, and voting rights

8. Partners' Rights and Obligations: Detailed rights and responsibilities of each partner, including participation in management and profit sharing

9. Profit and Loss Distribution: Method of calculating and distributing profits and losses, dividend policy, and Sharia-compliant profit-sharing mechanisms

10. Transfer of Shares: Restrictions on share transfers, right of first refusal, and transfer procedures

11. Term and Termination: Duration of partnership, termination events, and process for dissolution

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

13. Confidentiality: Protection of confidential information and trade secrets

14. Notices: Method and requirements for formal communications between partners

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