Conversion Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Conversion Agreement

"I need a Conversion Agreement to transform my Saudi limited liability company with 3 partners into a closed joint stock company by March 2025, including provisions for foreign ownership as one partner is from the UAE."

Document background
The Conversion Agreement serves as a crucial legal instrument in Saudi Arabia's evolving business landscape, particularly as companies adapt their structures to meet market demands and regulatory requirements. This document is essential when entities wish to change their legal form, such as converting from a limited liability company to a joint stock company, or vice versa. The agreement comprehensively addresses all aspects of the conversion process, including corporate governance, asset transfer, employee rights, and regulatory compliance. It is designed to align with Saudi Arabia's Companies Law, Foreign Investment Law, and other relevant regulations while maintaining Shariah compliance. The Conversion Agreement is particularly relevant in the context of Saudi Vision 2030, which has introduced various reforms encouraging business development and transformation.
Suggested Sections

1. Parties: Identification of the converting entity, its current shareholders/partners, and any other relevant parties

2. Background: Current corporate structure, reason for conversion, and brief history of the entity

3. Definitions: Key terms used throughout the agreement, including regulatory references and technical terms

4. Current Entity Status: Detailed description of the current legal structure, ownership, and capital

5. Conversion Process: Step-by-step process of the conversion, including regulatory approvals and timeline

6. Post-Conversion Structure: Details of the new entity structure, ownership distribution, and capital arrangement

7. Representations and Warranties: Statements of fact and assurances from all parties regarding their authority, compliance, and entity status

8. Assets and Liabilities Transfer: Provisions for the transfer of all assets, contracts, and liabilities to the new entity

9. Employee Matters: Arrangements for the transfer of employees and their rights to the new entity

10. Tax and Zakat Provisions: Handling of tax and Zakat obligations before and after conversion

11. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution mechanisms

12. Notices: Communication procedures between parties

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

Optional Sections

1. Shareholder Agreements: Required when existing shareholder agreements need modification or new ones need to be established

2. Intellectual Property Rights: Needed when the converting entity owns significant IP assets that require special treatment

3. Real Estate Provisions: Required when the entity owns real estate assets that need special treatment during conversion

4. Foreign Investment Provisions: Necessary when the conversion involves foreign ownership or investment

5. Regulatory Compliance: Required for regulated industries requiring specific compliance measures

6. Debt Restructuring: Needed when the conversion involves significant debt arrangements

7. Business Continuity: Required when specific arrangements are needed to ensure uninterrupted business operations

Suggested Schedules

1. Current Corporate Documents: Copies of existing commercial registration, articles of association, and licenses

2. New Constitutional Documents: Draft articles of association and other corporate documents for the new entity

3. Asset Schedule: Detailed list of all assets to be transferred

4. Contracts Schedule: List of all contracts to be transferred to the new entity

5. Employee Schedule: List of employees and their current terms of employment

6. Conversion Timeline: Detailed timeline of conversion steps and responsibilities

7. Required Governmental Approvals: List of all regulatory approvals needed for the conversion

8. Outstanding Liabilities: Schedule of all debts and liabilities to be transferred

9. Ownership Structure: Pre and post-conversion ownership details and capital distribution

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

Trading

Professional Services

Technology

Real Estate

Construction

Healthcare

Education

Retail

Financial Services

Tourism

Logistics

Energy

Mining

Relevant Teams

Legal

Finance

Corporate Governance

Compliance

Risk Management

Business Development

Operations

Human Resources

Corporate Affairs

Investment

Strategy

Board Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

Corporate Secretary

Legal Director

Business Development Director

Compliance Officer

Corporate Governance Officer

Finance Director

Managing Director

Board Member

Company Secretary

Investment Manager

Risk Manager

Operations 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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