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Business Shares Agreement

Business Shares Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Business Shares Agreement

"I need a Business Shares Agreement for the sale of 30% shareholding in a Saudi technology company to a foreign investor, with specific provisions for board representation and technology transfer restrictions, to be completed by March 2025."

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Document background
The Business Shares Agreement is a crucial document used in Saudi Arabia for facilitating and formalizing the transfer of company ownership through share transactions. This agreement is essential for businesses operating under Saudi law, particularly in light of the Kingdom's economic transformation program Vision 2030, which has introduced various reforms to enhance private sector participation and foreign investment. The document addresses key aspects such as share transfer mechanics, shareholder rights and obligations, corporate governance arrangements, and compliance with both Saudi Companies Law and Sharia principles. It's commonly used in scenarios including business acquisitions, corporate restructuring, joint ventures, and investment transactions, providing a legally robust framework for protecting all parties' interests while ensuring regulatory compliance.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including full legal names, commercial registration numbers, and addresses

2. Background: Context of the transaction, including company details, current shareholding structure, and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase of Shares: Core terms of the share transfer, including number of shares, price, and payment terms

5. Completion: Details of the completion process, timing, and conditions precedent

6. Warranties and Representations: Standard warranties from both seller and purchaser regarding capacity, authority, and share ownership

7. Covenants: Ongoing obligations of the parties, including pre-completion and post-completion commitments

8. Share Transfer Restrictions: Limitations on future transfer of shares, including right of first refusal and tag-along/drag-along rights

9. Corporate Governance: Management structure, board composition, and voting rights

10. Dividend Policy: Agreement on distribution of profits and dividend declarations

11. Confidentiality: Obligations regarding confidential information and trade secrets

12. Dispute Resolution: Mechanism for resolving disputes, including jurisdiction and applicable law

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

Optional Sections

1. Anti-dilution Rights: Protection against share dilution, used when there's potential for future share issuance

2. Put and Call Options: Rights to force purchase or sale of shares under specific circumstances

3. Non-competition: Restrictions on competitive activities, included when selling shareholders might compete

4. Management Provisions: Detailed management arrangements, needed for joint venture-style arrangements

5. Intellectual Property Rights: IP ownership and licensing provisions, important for technology companies

6. Employee Matters: Employee-related provisions, relevant when key employees are shareholders

7. Shariah Compliance: Specific provisions ensuring compliance with Islamic law, required for Islamic investors

8. Foreign Investment Provisions: Special provisions required when foreign investors are involved

Suggested Schedules

1. Share Capital Structure: Detailed breakdown of current and post-completion shareholding

2. Company Information: Key corporate details including registration documents and licenses

3. Warranties: Detailed warranties and representations by the parties

4. Completion Requirements: Checklist of documents and actions required for completion

5. Board Resolutions: Required corporate approvals and resolutions

6. Share Certificates: Copies of relevant share certificates

7. Financial Statements: Recent financial statements of the company

8. Material Contracts: List and copies of important company contracts

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Articles of Association
Board
Business Day
Commercial Registration
Company
Completion
Completion Date
Confidential Information
Consideration
Corporate Documents
Deed of Adherence
Encumbrance
Event of Default
Exercise Notice
Exercise Period
Fair Market Value
Financial Statements
Financial Year
Governmental Authority
Group
Initial Public Offering
Intellectual Property Rights
Law
Material Adverse Change
Material Contract
Ministry of Commerce
Parties
Purchase Price
Purchaser
Related Party
Relevant Shares
Reserved Matters
Sale Shares
Seller
Share Capital
Shareholder
Shareholders' Agreement
Shares
Sharia
Subsidiary
Tag-Along Right
Transfer
Valuation
Working Day
Zakat
Clauses
Sale and Purchase
Consideration and Payment
Conditions Precedent
Completion Obligations
Warranties and Representations
Pre-Completion Covenants
Post-Completion Covenants
Share Transfer Restrictions
Tag-Along Rights
Drag-Along Rights
Right of First Refusal
Anti-dilution Rights
Board Composition
Shareholder Meetings
Voting Rights
Reserved Matters
Dividend Policy
Information Rights
Management Rights
Non-Competition
Non-Solicitation
Confidentiality
Intellectual Property
Change of Control
Exit Provisions
Put and Call Options
Valuation Mechanisms
Default
Remedies
Force Majeure
Termination
Dispute Resolution
Governing Law
Jurisdiction
Notices
Assignment
Severability
Entire Agreement
Amendment
Costs
Sharia Compliance
Relevant Industries

Financial Services

Technology

Manufacturing

Real Estate

Healthcare

Retail

Energy

Transportation

Professional Services

Construction

Telecommunications

Education

Food and Beverage

Mining

Agriculture

Relevant Teams

Legal

Finance

Corporate Affairs

Compliance

Risk Management

Investment

Mergers & Acquisitions

Business Development

Board Secretariat

Corporate Governance

Strategy

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Investment Director

Mergers & Acquisitions Manager

Business Development Director

Finance Manager

Compliance Officer

Risk Manager

Board Member

Managing Director

Investment Banker

Private Equity Manager

Corporate Governance Officer

Shareholder Relations Manager

Industries
Companies Law (2015): The primary legislation governing company formation, structure, and shareholding in Saudi Arabia. It defines different types of companies, shareholder rights, transfer of shares, and corporate governance requirements.
Capital Market Law (2003): Regulates securities, trading of shares, and disclosure requirements for publicly listed companies. Important for share valuation and trading mechanisms.
Foreign Investment Law: Governs foreign ownership of shares in Saudi companies, including restrictions, requirements, and investment licenses needed for foreign shareholders.
Competition Law: Regulates market competition and prevents monopolistic practices. Relevant for share transfers that might result in market concentration.
Corporate Governance Regulations: Sets out governance requirements, shareholder rights, board responsibilities, and transparency requirements for Saudi companies.
Zakat, Tax and Customs Authority (ZATCA) Regulations: Outlines tax implications and zakat requirements for company shareholders, including capital gains tax on share transfers.
Anti-Money Laundering Law: Requires due diligence and compliance in share transactions to prevent money laundering and ensure legitimate business transfers.
Commercial Courts Law: Provides the legal framework for resolving disputes related to share transfers and shareholder agreements.
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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