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Limited Liability Partnership Agreement for Saudi Arabia

Limited Liability Partnership Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes and regulates a Limited Liability Partnership (LLP). This document outlines the rights, responsibilities, and obligations of partners while ensuring compliance with the Saudi Companies Law 2015 and relevant regulations. It includes provisions for capital contributions, profit sharing, management structure, decision-making processes, and partner exit mechanisms, all structured to align with both civil law principles and Shariah requirements specific to the Saudi jurisdiction.

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Limited Liability Partnership Agreement

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What is a Limited Liability Partnership Agreement?

The Limited Liability Partnership Agreement is a foundational document used when establishing a partnership business structure in Saudi Arabia where partners wish to limit their liability while maintaining operational flexibility. This document is essential for businesses operating under the Saudi Companies Law 2015 and must comply with both civil law requirements and Shariah principles. It details critical aspects such as capital contributions, profit-sharing arrangements, management responsibilities, and decision-making processes. The agreement is particularly relevant in the context of Saudi Arabia's Vision 2030 economic reforms, which have created new opportunities for business partnerships between local and international entities. The document must be drafted with careful consideration of Saudi regulatory requirements, including those from the Ministry of Commerce and relevant sector-specific authorities.

What sections should be included in a Limited Liability Partnership Agreement?

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

2. Background: Context of the partnership formation and partners' intention to establish an LLP

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Partnership Formation: Declaration of partnership establishment, business purpose, and term

5. Capital and Contributions: Details of initial capital, partner contributions, and capital maintenance requirements

6. Partnership Interests: Allocation of partnership interests and profit/loss sharing ratios

7. Management and Decision Making: Management structure, partner authorities, and decision-making processes

8. Partners' Rights and Obligations: Detailed rights and duties of partners, including voting rights and responsibilities

9. Financial Matters: Financial management, accounting practices, and distribution policies

10. Transfer of Partnership Interests: Rules for transferring interests, including restrictions and procedures

11. Partner Exit Provisions: Procedures for partner withdrawal, retirement, or death

12. Dissolution and Liquidation: Circumstances and procedures for partnership dissolution

13. Confidentiality: Protection of partnership's confidential information

14. Dispute Resolution: Procedures for resolving disputes between partners

15. Governing Law: Confirmation of Saudi law application and Shariah compliance

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

What sections are optional to include in a Limited Liability Partnership Agreement?

1. Non-Competition: Restrictions on partners' competing activities, used when partners have other business interests

2. Intellectual Property: IP ownership and usage rights, included when the partnership involves significant IP assets

3. Partner Loans: Terms for partner loans to the partnership, used when additional financing is anticipated

4. Foreign Partner Provisions: Special provisions for foreign partners, included when there are non-Saudi partners

5. Zakat and Tax Provisions: Detailed tax handling, used when partners have different tax/Zakat obligations

6. Executive Committee: Formation and powers of an executive committee, used in larger partnerships

7. Branch Offices: Provisions for establishing branch offices, used when geographic expansion is planned

What schedules should be included in a Limited Liability Partnership Agreement?

1. Schedule 1: Partner Details: Detailed information about each partner, including contact details and initial capital contributions

2. Schedule 2: Business Plan: Initial business plan and objectives of the partnership

3. Schedule 3: Capital Contributions: Detailed breakdown of each partner's capital contributions (cash, assets, or services)

4. Schedule 4: Management Structure: Detailed management structure and procedures

5. Schedule 5: Reserved Matters: List of decisions requiring special approval or unanimous consent

6. Schedule 6: Valuation Methodology: Agreed methods for valuing partnership interests

7. Appendix A: Power of Attorney Template: Standard form for appointing representatives

8. Appendix B: Transfer Notice Template: Standard form for notifying transfer of partnership interests

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

Cost

Free to use
Relevant legal definitions












































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Relevant Industries

Professional Services

Consulting

Legal Services

Accounting and Audit

Engineering

Architecture

Healthcare

Information Technology

Real Estate

Trading

Manufacturing

Construction

Education and Training

Financial Services

Relevant Teams

Legal

Compliance

Finance

Corporate Governance

Business Development

Operations

Risk Management

Corporate Secretariat

Management

Executive Leadership

Business Affairs

Strategic Planning

Relevant Roles

Managing Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Compliance Officer

Business Development Manager

Corporate Secretary

Partner

Senior Partner

Managing Director

Board Member

Operations Director

Finance Director

General Counsel

Company Secretary

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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