Co Founder Agreement for United Arab Emirates

Co Founder Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the formal relationship between two or more co-founders of a business venture. This document outlines the fundamental aspects of the business relationship including ownership structure, responsibilities, decision-making processes, and capital contributions, while ensuring compliance with UAE Federal Law No. 32 of 2021 (Companies Law) and other relevant UAE regulations. The agreement incorporates provisions for dispute resolution under UAE jurisdiction and addresses specific requirements for company formation and operation within the UAE business environment.

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What is a Co Founder Agreement?

The Co-Founder Agreement serves as the foundational document for establishing a business partnership in the UAE, typically used when two or more individuals decide to start a business venture together. This agreement is essential for compliance with UAE Federal Law No. 32 of 2021 and related regulations governing company formation and operation. It details crucial elements such as equity distribution, capital contributions, roles and responsibilities, decision-making processes, and dispute resolution mechanisms. The document should be prepared at the early stages of business formation, preferably before company registration, to prevent future disagreements and ensure clear understanding between all parties. Given the UAE's unique legal framework, which combines civil law with Sharia principles, the agreement must be carefully structured to ensure enforceability and compliance with local requirements.

What sections should be included in a Co Founder Agreement?

1. Parties: Identification and details of all co-founders entering into the agreement

2. Background: Context of the agreement, including the business concept and purpose of the collaboration

3. Definitions: Key terms used throughout the agreement

4. Business of the Company: Detailed description of the company's intended business activities and scope

5. Incorporation and Structure: Details of company formation, legal structure, and registration requirements under UAE law

6. Capital Contributions: Initial and future capital contributions of each co-founder, including valuation of non-cash contributions

7. Shareholding Structure: Distribution of shares among co-founders and any vesting schedules

8. Roles and Responsibilities: Specific duties, commitments, and areas of responsibility for each co-founder

9. Decision Making: Governance structure and voting rights for key business decisions

10. Board Composition: Structure and operation of the board of directors

11. Profit Distribution: Methods and timing of profit distribution among co-founders

12. Transfer of Shares: Rules regarding share transfers, including right of first refusal and tag-along/drag-along rights

13. Confidentiality: Protection of company and co-founder confidential information

14. Non-Compete and Non-Solicitation: Restrictions on competitive activities and employee solicitation

15. Termination: Circumstances and procedures for terminating the agreement or co-founder relationship

16. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and applicable law under UAE regulations

17. General Provisions: Standard legal provisions including notices, amendments, and severability

What sections are optional to include in a Co Founder Agreement?

1. Intellectual Property Rights: Detailed provisions for IP ownership and development when significant IP is involved

2. Additional Funding: Procedures for securing and managing additional funding when future capital raises are anticipated

3. Employee Stock Option Pool: Structure and management of ESOP when planning to offer equity to employees

4. Advisory Board: Framework for establishing and managing an advisory board when external expertise is needed

5. International Operations: Provisions for international business activities when planning to operate outside UAE

6. Shariah Compliance: Additional provisions ensuring Shariah compliance when required for specific business activities

7. Digital Assets: Management and ownership of digital assets when the business involves significant online components

8. Research and Development: Provisions for R&D activities and resulting IP when the business is technology-focused

What schedules should be included in a Co Founder Agreement?

1. Schedule 1: Business Plan: Detailed business plan including market analysis, strategy, and financial projections

2. Schedule 2: Initial Capital Contributions: Detailed breakdown of each co-founder's initial capital contributions

3. Schedule 3: Share Vesting Schedule: Detailed vesting schedule for founder shares

4. Schedule 4: IP Assignment: List and details of any pre-existing IP being assigned to the company

5. Schedule 5: Key Performance Indicators: Specific metrics for measuring co-founder performance

6. Schedule 6: Company Formation Documents: Copies of company registration and licensing documents

7. Appendix A: Founder Responsibilities Matrix: Detailed breakdown of each founder's roles and responsibilities

8. Appendix B: Reserved Matters: List of decisions requiring special majority or unanimous consent

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

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Technology

E-commerce

Financial Services

Healthcare

Education

Real Estate

Manufacturing

Professional Services

Retail

Media and Entertainment

Food and Beverage

Consulting

Logistics

Renewable Energy

Tourism and Hospitality

Relevant Teams

Legal

Executive Leadership

Board of Directors

Corporate Governance

Finance

Administration

Company Secretariat

Business Development

Strategy

Risk Management

Relevant Roles

Chief Executive Officer

Managing Director

Founder

Co-Founder

Chief Financial Officer

Chief Technology Officer

Chief Operating Officer

Legal Counsel

Company Secretary

Business Development Director

Board Member

Executive Director

Managing Partner

Startup Entrepreneur

General Manager

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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