Company Separation Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Company Separation Agreement

"I need a Company Separation Agreement for the division of a Saudi manufacturing joint venture into two independent entities, with completion planned for March 2025, including specific provisions for intellectual property rights and employee transfers between the separated entities."

Document background
A Company Separation Agreement is a crucial document used when two or more business entities in Saudi Arabia decide to formally separate their operations, ownership, or business interests. This agreement is essential for companies undergoing demergers, spin-offs, or divisional separations, and must comply with Saudi Arabian legal requirements, including the Companies Law, Labor Law, and Sharia principles. The document comprehensively addresses all aspects of the separation, including asset division, employee matters, financial settlements, continuing obligations, and regulatory compliance. It is particularly important in the Saudi context due to specific local regulatory requirements, government approval processes, and the need for alignment with Islamic business principles. The agreement serves as both a roadmap for the separation process and a legally binding document that protects all parties' interests while ensuring compliance with Saudi Arabian legal and regulatory frameworks.
Suggested Sections

1. Parties: Identification of all parties involved in the separation, including legal entity details and registration numbers

2. Background: Context of the business relationship and reasons for separation

3. Definitions: Key terms used throughout the agreement, including Arabic translations where necessary

4. Effective Date and Transition Period: Specification of when the separation takes effect and timeline for transition

5. Asset Division: Detailed allocation of tangible and intangible assets between parties

6. Financial Settlement: Terms of financial separation, including payment obligations and settlements

7. Employee Matters: Treatment of employees, transfer arrangements, and compliance with Saudi Labor Law

8. Intellectual Property Rights: Division and future use of intellectual property assets

9. Confidentiality: Ongoing obligations regarding confidential information and trade secrets

10. Non-Compete and Non-Solicitation: Restrictions on future business activities and employee solicitation

11. Tax Matters: Allocation of tax liabilities and obligations

12. Representations and Warranties: Standard declarations by all parties regarding their authority and compliance

13. Dispute Resolution: Procedures for resolving disputes under Saudi law

14. Governing Law: Confirmation of Saudi law as governing law and relevant jurisdictional matters

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

Optional Sections

1. Real Estate Matters: Include when real property transfers are involved in the separation

2. Government Contracts: Include when dealing with transfer or termination of government contracts

3. Environmental Matters: Include when environmental liabilities or compliance issues need to be addressed

4. Islamic Finance Compliance: Include when specific Sharia-compliant financing arrangements need to be addressed

5. Foreign Investment Provisions: Include when foreign ownership or investment is involved

6. Data Protection: Include when significant personal or customer data is involved

7. Force Majeure: Include when specific provisions for unforeseen circumstances are needed

8. Business Continuation: Include when ongoing business relationships will continue in some form

9. Third Party Consents: Include when material third-party agreements require consent for separation

Suggested Schedules

1. Schedule 1 - Asset Register: Detailed list of all assets being divided, including valuations

2. Schedule 2 - Employee Transfer List: List of employees and their transfer arrangements

3. Schedule 3 - Intellectual Property Register: Comprehensive list of IP rights and their allocation

4. Schedule 4 - Contracts List: List of contracts being transferred or terminated

5. Schedule 5 - Financial Settlement Details: Detailed breakdown of financial settlements and payments

6. Schedule 6 - Transition Services Agreement: Details of any temporary service arrangements between parties

7. Schedule 7 - Property Details: Details of real estate and property matters

8. Schedule 8 - Outstanding Liabilities: List of all liabilities and their allocation

9. Appendix A - Required Government Approvals: List of necessary regulatory approvals and status

10. Appendix B - Timeline and Milestones: Detailed separation implementation schedule

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

Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Oil & Gas

Financial Services

Technology

Retail

Healthcare

Construction

Telecommunications

Professional Services

Real Estate

Transportation & Logistics

Education

Mining & Minerals

Food & Beverage

Media & Entertainment

Relevant Teams

Legal

Finance

Human Resources

Operations

Compliance

Risk Management

Corporate Affairs

Strategy

Business Development

Information Technology

Facilities Management

Corporate Communications

Internal Audit

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Chief Operating Officer

Corporate Counsel

Legal Director

Finance Director

Human Resources Director

Company Secretary

Board Member

Managing Director

Compliance Officer

Risk Manager

Business Development Director

Operations Manager

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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