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Partnership Settlement Agreement for Saudi Arabia

Partnership Settlement Agreement Template for Saudi Arabia

A Partnership Settlement Agreement under Saudi Arabian law is a comprehensive legal document that formalizes the dissolution and settlement terms between partners in a business partnership. This document, governed by Saudi Commercial Law and Sharia principles, outlines the complete terms of partnership dissolution, including asset distribution, liability allocation, and mutual releases. It must comply with both modern commercial regulations and Islamic legal requirements, making it unique to the Saudi jurisdiction. The agreement typically includes detailed provisions for financial settlements, asset transfers, and ongoing obligations, while ensuring all terms are enforceable under Saudi law.

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What is a Partnership Settlement Agreement?

A Partnership Settlement Agreement is a crucial document used when business partners in Saudi Arabia decide to formally end their business relationship and settle all outstanding matters between them. This document serves as the definitive agreement outlining how the partnership will be dissolved, assets distributed, and liabilities settled, all while ensuring compliance with Saudi Commercial Law and Sharia principles. It is particularly important in the Saudi context as it must address both modern commercial requirements and Islamic legal principles. The agreement typically comes into play during voluntary dissolution, partner buyouts, or when disputes necessitate a formal separation. It includes comprehensive details about financial settlements, asset distribution, ongoing obligations, and mutual releases, while also addressing any regulatory requirements specific to Saudi Arabia, such as notifications to the Ministry of Commerce and other relevant authorities.

What sections should be included in a Partnership Settlement Agreement?

1. Parties: Identification of all partnership parties involved in the settlement

2. Background: Context of the partnership, reason for dissolution, and brief history of the business relationship

3. Definitions: Key terms used throughout the agreement, including specific Saudi legal and commercial terms

4. Settlement Terms: Core settlement provisions including financial settlements, asset distribution, and liability allocation

5. Partnership Dissolution: Formal dissolution provisions and procedures in accordance with Saudi law

6. Asset Distribution: Detailed provisions for the distribution of partnership assets, including physical assets, intellectual property, and contracts

7. Financial Settlement: Specific financial terms, payment schedules, and monetary considerations

8. Release and Discharge: Mutual release of claims and obligations between partners

9. Confidentiality: Provisions regarding confidentiality of partnership information and settlement terms

10. Governing Law and Jurisdiction: Explicit reference to Saudi law governance and jurisdictional matters

11. Representations and Warranties: Partners' confirmations and guarantees regarding their authority and the settlement terms

12. Execution: Signature requirements and execution formalities compliant with Saudi law

What sections are optional to include in a Partnership Settlement Agreement?

1. Employee Matters: Required when the settlement involves transfer or termination of employees

2. Intellectual Property Rights: Needed when the partnership owns significant IP assets requiring allocation

3. Outstanding Litigations: Include when there are ongoing legal proceedings involving the partnership

4. Tax Matters: Required when specific tax allocations or obligations need to be addressed

5. Non-Compete Provisions: Include when partners agree to restrictions on future business activities

6. Ongoing Projects: Necessary when dealing with incomplete projects or contracts

7. Islamic Finance Compliance: Required when settlement involves Islamic financing arrangements

8. Third Party Consents: Include when settlement requires approvals from external parties

What schedules should be included in a Partnership Settlement Agreement?

1. Schedule 1: Asset Inventory: Detailed list of all partnership assets and their agreed values

2. Schedule 2: Financial Statements: Final partnership accounts and financial position

3. Schedule 3: Distribution Plan: Detailed breakdown of how assets and liabilities will be distributed

4. Schedule 4: Payment Schedule: Timeline and terms of any financial settlements between partners

5. Schedule 5: Outstanding Obligations: List of all partnership debts, liabilities, and obligations

6. Appendix A: Partner Releases: Form of mutual release documents

7. Appendix B: Transfer Documents: Templates for asset transfer documentation

8. Appendix C: Government Notifications: Required forms for notifying Saudi authorities of partnership dissolution

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













































Clauses



































Relevant Industries

Professional Services

Manufacturing

Real Estate

Trading

Construction

Technology

Financial Services

Healthcare

Retail

Hospitality

Industrial

Agriculture

Mining

Education

Transportation

Relevant Teams

Legal

Finance

Compliance

Corporate Secretariat

Risk Management

Operations

Business Development

Executive Leadership

Corporate Governance

Commercial Operations

Relevant Roles

Managing Partner

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Business Development Manager

Finance Director

Compliance Officer

Risk Manager

Partnership Manager

Operations Director

Board Member

Commercial Director

Managing Director

General Counsel

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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