60 40 Partnership Agreement for United Arab Emirates

60 40 Partnership Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes a partnership structure with a 60/40 profit-sharing arrangement between two or more parties. This document outlines the terms and conditions of the partnership, including capital contributions, management responsibilities, profit distribution mechanisms, and operational procedures, while ensuring compliance with UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and other relevant UAE regulations. The agreement provides a framework for partners to formalize their business relationship, establish clear governance structures, and protect their respective interests within the UAE legal system.

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What is a 60 40 Partnership Agreement?

The 60/40 Partnership Agreement is a crucial legal document used in the United Arab Emirates to establish formal business partnerships where profits and responsibilities are divided in a 60/40 ratio. This structure is common in the UAE market, particularly where one partner contributes greater capital or expertise. The agreement must comply with UAE Federal Law No. 32 of 2021 and related regulations, making it suitable for various business ventures from small enterprises to large commercial operations. It comprehensively covers partnership terms, capital contributions, profit distribution, management rights, dispute resolution, and exit mechanisms, while accounting for specific UAE legal requirements such as local ownership rules where applicable. This document is essential for businesses seeking to establish clear partner relationships with unequal profit sharing while maintaining legal compliance in the UAE jurisdiction.

What sections should be included in a 60 40 Partnership Agreement?

1. Parties: Identification and details of all partners entering into the agreement

2. Background: Context of the partnership formation and brief description of the business purpose

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

4. Partnership Structure: Details of ownership percentages (60/40 split) and legal form of partnership

5. Capital Contributions: Initial and subsequent capital contributions from each partner

6. Profit and Loss Sharing: 60/40 profit-sharing mechanism and loss allocation terms

7. Management and Control: Decision-making processes and management responsibilities

8. Partners' Rights and Obligations: Detailed rights and duties of each partner

9. Business Operations: Day-to-day operation procedures and business management

10. Banking and Financial Matters: Banking arrangements, accounting practices, and financial management

11. Term and Termination: Duration of partnership and conditions for termination

12. Dispute Resolution: Procedures for resolving disputes between partners

13. Governing Law: Specification of UAE law as governing law and jurisdiction

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a 60 40 Partnership Agreement?

1. Non-Competition: Restrictions on partners engaging in competing businesses, include when partners have other business interests

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

3. Insurance: Required insurance coverage, include when business activities require specific insurance

4. Employee Matters: Employment policies and procedures, include when partnership will have employees

5. Anti-Money Laundering: AML compliance procedures, include for financial services or high-value transactions

6. Force Majeure: Provisions for unforeseen circumstances, include for long-term partnerships or high-risk activities

7. Confidentiality: Protection of partnership's confidential information, include when dealing with sensitive information

What schedules should be included in a 60 40 Partnership Agreement?

1. Schedule 1 - Capital Contributions: Detailed breakdown of initial and committed capital contributions

2. Schedule 2 - Business Plan: Initial business plan and strategic objectives

3. Schedule 3 - Management Structure: Detailed management hierarchy and responsibilities

4. Schedule 4 - Profit Distribution Policy: Detailed mechanism for calculating and distributing profits

5. Schedule 5 - Partner Information: Detailed information about partners including contact details and representatives

6. Schedule 6 - Key Performance Indicators: Metrics for measuring partnership performance

7. Appendix A - Required Licenses: List of required business licenses and permits

8. Appendix B - Asset Register: Initial list of partnership assets and their values

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate Development

Trading and Import/Export

Professional Services

Retail and Commerce

Technology and Software

Manufacturing

Hospitality and Tourism

Construction and Engineering

Healthcare Services

Financial Services

Consulting Services

Food and Beverage

Relevant Teams

Legal

Finance

Corporate Governance

Compliance

Risk Management

Business Development

Operations

Executive Leadership

Administrative

Company Secretariat

Relevant Roles

Chief Executive Officer

Managing Director

Business Owner

Legal Counsel

Corporate Lawyer

Chief Financial Officer

Business Development Manager

Company Secretary

Partnership Manager

Operations Director

Investment Manager

Compliance Officer

Risk Manager

General Counsel

Financial Controller

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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