Informal Partnership Agreement for United Arab Emirates

Informal Partnership Agreement Template for United Arab Emirates

An Informal Partnership Agreement under UAE law is a contractual arrangement that establishes the terms and conditions between two or more parties who wish to conduct business together without forming a formal corporate entity. This document, governed by UAE Commercial Transactions Law and Civil Code, outlines the essential aspects of the partnership including capital contributions, profit-sharing arrangements, management responsibilities, and dispute resolution mechanisms. It provides a legally recognized framework while maintaining operational flexibility, making it particularly suitable for small to medium-sized business ventures in the UAE.

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What is a Informal Partnership Agreement?

The Informal Partnership Agreement is commonly used in the UAE business environment when two or more parties wish to collaborate on business ventures without establishing a formal corporate entity. This document type is particularly relevant for small-scale business operations, professional services, or trial business relationships. It must comply with UAE Commercial Transactions Law (Federal Law No. 18 of 1993) and consider Sharia law principles. The agreement typically includes provisions for capital contributions, profit sharing, management responsibilities, and dispute resolution, while offering more flexibility than formal company structures. This type of partnership agreement is especially useful for testing business relationships, short-term projects, or situations where partners want to minimize initial regulatory compliance requirements while maintaining clear terms of cooperation.

What sections should be included in a Informal Partnership Agreement?

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

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

3. Definitions: Key terms used throughout the agreement

4. Partnership Business: Detailed description of the business activities to be undertaken

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

6. Profit and Loss Sharing: Agreement on how profits and losses will be distributed among partners

7. Management and Decision Making: Partners' roles, responsibilities, and decision-making processes

8. Banking and Financial Records: Management of partnership finances and record-keeping requirements

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

10. Dispute Resolution: Process for resolving disagreements between partners

11. Governing Law: Specification of UAE law as governing law and relevant jurisdictions

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

1. Non-Competition: Restrictions on partners engaging in competing businesses

2. Intellectual Property Rights: Ownership and use of IP created during the partnership

3. Insurance: Required insurance coverage for the partnership

4. Assignment and Transfer of Interest: Rules for transferring partnership interests to third parties

5. Force Majeure: Provisions for unforeseen circumstances affecting partnership operations

6. Confidentiality: Protection of partnership's confidential information

7. Additional Capital Calls: Process for requesting additional capital from partners

8. Partnership Meetings: Structure and frequency of partnership meetings

What schedules should be included in a Informal Partnership Agreement?

1. Schedule A - Initial Capital Contributions: Detailed breakdown of each partner's initial capital contribution

2. Schedule B - Profit Sharing Ratios: Specific percentages or formulas for profit distribution

3. Schedule C - Business Plan: Initial business plan and objectives

4. Schedule D - Partner Contact Details: Complete contact information for all partners

5. Appendix 1 - Banking Arrangements: Details of partnership bank accounts and authorized signatories

6. Appendix 2 - 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

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Professional Services

Consulting

Food & Beverage

E-commerce

Technology

Real Estate

Trading

Creative Industries

Healthcare Services

Education & Training

Digital Marketing

Construction

Tourism & Hospitality

Relevant Teams

Legal

Commercial

Business Development

Operations

Finance

Compliance

Strategy

Risk Management

Corporate Development

Relevant Roles

Business Owner

Entrepreneur

Managing Partner

General Manager

Business Development Manager

Legal Counsel

Commercial Director

Operations Manager

Finance Manager

Project Manager

Professional Service Provider

Consultant

Small Business Advisor

Business Strategy Director

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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