50 50 Partnership Agreement Template for Saudi Arabia

The 50-50 Partnership Agreement is a fundamental legal document used when two parties wish to establish an equal partnership business venture in Saudi Arabia. This agreement type is particularly relevant when partners want to maintain equal control and influence over the business while sharing risks and rewards equally. The document must comply with Saudi Companies Law, Sharia principles, and other relevant regulations, making it suitable for both domestic and foreign investment partnerships (subject to foreign investment restrictions). It covers essential aspects such as capital contributions, profit sharing, management rights, operational procedures, and exit mechanisms, while incorporating necessary provisions for regulatory compliance and dispute resolution under Saudi jurisdiction.

1. Parties: Identification of the partners, including full legal names, addresses, and nationality

2. Background: Context of the partnership formation and partners' intention to establish a 50-50 partnership

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Partnership Structure: Confirmation of 50-50 ownership, legal form of partnership, and registration requirements

5. Capital Contribution: Details of initial and any agreed future capital contributions from each partner

6. Profit and Loss Sharing: Equal distribution mechanism for profits and losses, including timing and method of distribution

7. Management and Decision Making: Partnership management structure, voting rights, and decision-making processes

8. Partners' Rights and Obligations: Detailed responsibilities and rights of each partner, including operational involvement

9. Business Operations: Day-to-day management, scope of business, and operational procedures

10. Banking and Finance: Banking arrangements, signing authorities, and financial management procedures

11. Accounts and Records: Requirements for maintaining partnership accounts, records, and financial reporting

12. Transfer of Partnership Interest: Restrictions and procedures for transferring partnership interests

13. Term and Termination: Duration of partnership and circumstances allowing termination

14. Dispute Resolution: Procedures for resolving disputes, including reference to Saudi courts or arbitration

15. Governing Law: Confirmation of Saudi law as governing law and compliance with Sharia principles

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