Partnership Agreement for United Arab Emirates

Partnership Agreement Template for United Arab Emirates

A Free Partnership Agreement under UAE law is a comprehensive legal document that establishes and governs the relationship between two or more partners conducting business together. This agreement, regulated primarily by UAE Federal Law No. 2 of 2015 (Commercial Companies Law), outlines the essential terms of partnership including capital contributions, profit-sharing arrangements, management responsibilities, and partner obligations. It provides the legal framework for partners to operate their business while ensuring compliance with UAE commercial regulations and protecting the interests of all parties involved.

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What is a Partnership Agreement?

The Free Partnership Agreement is a fundamental legal document used in the United Arab Emirates when two or more parties wish to establish a business partnership with flexible operational terms. This agreement type is particularly suitable for professional services and trading activities, where partners seek to combine their resources and expertise while maintaining individual liability for their contributions. The document must comply with UAE Federal Law No. 2 of 2015 and related regulations, addressing key aspects such as capital contributions, profit-sharing, management structure, and partner obligations. It's commonly used by entrepreneurs, professionals, and businesses looking to establish a partnership structure that offers more flexibility than a limited liability company while still providing a formal legal framework for their business relationship.

What sections should be included in a Partnership Agreement?

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

2. Background: Context of the partnership formation and partners' intention to establish a free partnership

3. Definitions: Key terms used throughout the agreement defined for clarity and legal certainty

4. Partnership Formation: Declaration of partnership establishment, business name, and official registration details

5. Purpose and Business Activities: Detailed description of partnership's business objectives and permitted activities

6. Capital Contributions: Details of initial and any subsequent capital contributions by partners

7. Profit and Loss Distribution: Formula and mechanisms for sharing profits and losses among partners

8. Management and Control: Partnership management structure, decision-making processes, and voting rights

9. Partners' Rights and Obligations: Detailed responsibilities and rights of each partner

10. Banking and Financial Matters: Banking arrangements, financial record-keeping, and accounting procedures

11. Transfer of Partnership Interest: Rules governing the transfer of partnership shares and admission of new partners

12. Term and Termination: Duration of partnership and circumstances leading to termination

13. Dissolution and Liquidation: Procedures for partnership dissolution and asset distribution

14. Governing Law and Jurisdiction: Confirmation of UAE law application and jurisdiction for disputes

15. Notices: Procedures for formal communications between partners

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

What sections are optional to include in a Partnership Agreement?

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

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

3. Employee Matters: Guidelines for hiring and managing employees, included when the partnership plans to have employees

4. Islamic Finance Compliance: Specific provisions ensuring Shariah compliance, included when partners require Islamic finance principles

5. Branch Offices: Provisions for establishing and managing branch offices, included when geographic expansion is planned

6. Dispute Resolution: Detailed arbitration or mediation procedures, included when partners want specific dispute resolution mechanisms

7. Insurance: Required insurance coverage and obligations, included when specific business risks need to be covered

8. Force Majeure: Provisions for unforeseen circumstances, included when business is susceptible to external disruptions

What schedules should be included in a Partnership Agreement?

1. Schedule 1 - Capital Contributions: Detailed breakdown of each partner's capital contributions, including valuations of non-cash contributions

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

3. Schedule 3 - Management Structure: Detailed organizational structure and management responsibilities

4. Schedule 4 - Profit Distribution Mechanism: Detailed calculations and timelines for profit distribution

5. Schedule 5 - Partner Information: Detailed information about each partner, including contact details and representatives

6. Appendix A - Required Licenses: List of licenses and permits required for partnership operation

7. Appendix B - Partnership Policies: Key operational policies and procedures

8. Appendix C - Asset Register: List of partnership assets and their ownership status

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
Clauses
Relevant Industries

Retail

Professional Services

Trading

Manufacturing

Real Estate

Technology

Consulting

Food and Beverage

Healthcare

Education

Construction

Tourism and Hospitality

Media and Entertainment

Financial Services

Logistics and Transportation

Relevant Teams

Legal

Finance

Corporate Governance

Compliance

Business Development

Operations

Risk Management

Strategy

Corporate Affairs

Executive Leadership

Relevant Roles

Chief Executive Officer

Business Owner

Managing Partner

Legal Counsel

Chief Financial Officer

Business Development Manager

Corporate Lawyer

Company Secretary

Finance Director

Operations Manager

Risk Manager

Compliance Officer

Partnership Manager

Strategy Director

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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