Business Purchase Contract for United Arab Emirates

Business Purchase Contract Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that documents the sale and purchase of an existing business, including its assets, operations, and potentially shares. The document addresses crucial aspects such as purchase price, warranties, representations, conditions precedent, and completion mechanics, while ensuring compliance with UAE Federal and Emirates-specific regulations. It includes provisions for employee transfers, asset ownership, intellectual property rights, and ongoing obligations of both parties, structured in accordance with UAE Commercial Transactions Law and related legislation.

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What is a Business Purchase Contract?

The Business Purchase Contract is a fundamental document used in the United Arab Emirates for transactions involving the sale and acquisition of existing businesses. It serves as the primary agreement between a seller and buyer, detailing all aspects of the business transfer including assets, liabilities, employees, and operational components. The document must comply with UAE Federal Law No. 18 of 1993 (Commercial Transactions Law), Federal Decree-Law No. 32 of 2021 (Commercial Companies Law), and other relevant UAE legislation. This contract type is essential for ensuring legal certainty in business transfers, protecting both parties' interests, and facilitating smooth ownership transition while maintaining compliance with local regulatory requirements, including necessary approvals from relevant economic departments.

What sections should be included in a Business Purchase Contract?

1. Parties: Identification of the seller and buyer, including full legal names, registration numbers, and registered addresses

2. Background: Context of the transaction, brief description of the business, and purpose of the agreement

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

4. Sale and Purchase: Core transaction terms including what is being sold and purchased

5. Purchase Price: Details of the consideration, payment terms, and any adjustments

6. Conditions Precedent: Conditions that must be satisfied before completion can occur

7. Pre-Completion Obligations: Obligations of both parties between signing and completion, including business conduct requirements

8. Completion: Mechanics of completion, including timing, location, and actions required

9. Seller's Warranties: Warranties given by the seller regarding the business, assets, and liabilities

10. Buyer's Warranties: Warranties given by the buyer, typically regarding capacity and authority

11. Limitations on Liability: Limitations on the seller's liability under the warranties and indemnities

12. Post-Completion Obligations: Obligations after completion, including transition arrangements

13. Confidentiality: Obligations regarding confidential information and announcements

14. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

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

What sections are optional to include in a Business Purchase Contract?

1. Employee Matters: Required if employees are being transferred with the business, addressing employment continuity and benefits

2. Real Estate: Required if the business includes owned or leased property, addressing transfer mechanics and permissions

3. Intellectual Property: Required if significant IP assets are involved, addressing ownership and transfer

4. Environmental Matters: Required for businesses with environmental risks or compliance obligations

5. Tax Covenant: Required for complex transactions with significant tax implications

6. Non-Competition: Optional restrictions on seller's future competitive activities

7. Earn-out Provisions: Required if part of purchase price is contingent on future performance

8. Working Capital Adjustment: Required if purchase price includes working capital adjustment mechanism

9. Bank Guarantees: Required if payment terms include bank guarantees or similar security

10. Shareholder Approval: Required if transaction requires shareholder approval under UAE Companies Law

What schedules should be included in a Business Purchase Contract?

1. Business Description: Detailed description of the business being purchased

2. Assets Schedule: Comprehensive list of assets included in the sale

3. Excluded Assets: List of assets explicitly excluded from the sale

4. Properties: Details of owned and leased properties

5. Intellectual Property Rights: List of all IP rights owned or used by the business

6. Material Contracts: List and copies of key business contracts

7. Employee Information: Details of employees, including terms of employment

8. Completion Obligations: Detailed list of documents and actions required at completion

9. Warranties: Detailed warranties given by the seller

10. Permitted Encumbrances: List of permitted liens and encumbrances on assets

11. Required Consents: List of third-party consents required for the transaction

12. Form of Transfer Instruments: Pro forma transfer documents required at completion

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

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Manufacturing

Professional Services

Technology

Healthcare

Hospitality

Real Estate

Construction

Trading

Education

Transportation

Food & Beverage

Industrial

Media & Entertainment

Financial Services

Automotive

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Executive Leadership

Risk & Compliance

Operations

Strategy

Business Development

Due Diligence

Integration

Company Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Legal Director

Corporate Lawyer

Business Development Director

Mergers & Acquisitions Manager

Finance Director

Commercial Director

Operations Director

Company Secretary

Risk Manager

Compliance Officer

Due Diligence Manager

Integration Manager

Strategic Planning Director

Industries
UAE Federal Law No. 18 of 1993 (Commercial Transactions Law): Governs commercial transactions and business dealings in the UAE, including sale and purchase agreements, commercial obligations, and transfer of business ownership
UAE Federal Decree-Law No. 32 of 2021 (Commercial Companies Law): Regulates business entities and corporate structures, crucial for determining the legal framework of the business transfer and any corporate approvals required
UAE Federal Decree-Law No. 33 of 2021 (Labour Law): Governs employment relationships and worker rights, relevant for handling employee transfers and protecting their rights during business acquisition
UAE Federal Decree-Law No. 8 of 2017 (VAT Law): Addresses VAT implications in business transfers and asset sales, including whether the transaction qualifies as a transfer of going concern
UAE Federal Law No. 4 of 2012 (Competition Law): Regulates competition and prevents monopolistic practices, relevant for ensuring the business purchase doesn't violate competition regulations
UAE Federal Law No. 19 of 2018 (Foreign Direct Investment Law): Important for transactions involving foreign buyers or sellers, determining ownership restrictions and foreign investment regulations
UAE Federal Law No. 4 of 2000 (Securities and Commodities Authority Law): Relevant if the business purchase involves listed companies or regulated securities
Local Economic Department Regulations: Specific regulations from the relevant emirate's economic department regarding business transfers and licensing requirements
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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