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Limited Liability Company Agreement

Limited Liability Company Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Limited Liability Company Agreement

"I need a Limited Liability Company Agreement for a Saudi Arabian technology startup with three partners (two local and one foreign investor), with an initial capital of SAR 500,000, incorporating specific provisions for intellectual property protection and future funding rounds."

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Document background
The Limited Liability Company Agreement is essential for establishing and operating an LLC in Saudi Arabia. This document is required when two or more parties wish to form a limited liability company under Saudi Arabian law, with the minimum capital requirements and structural elements prescribed by the Companies Law of 2015. It sets out the rights and obligations of shareholders, management structure, profit distribution mechanisms, and operational procedures while ensuring compliance with local regulations and Shariah principles. The agreement is particularly crucial as it provides the legal framework for protecting shareholders' interests, limiting their liability to their capital contribution, and establishing clear governance procedures for the company's operations.
Suggested Sections

1. Parties: Identifies and provides details of all founding partners/shareholders

2. Background: States the intent to form an LLC and any relevant context

3. Definitions: Defines key terms used throughout the agreement

4. Formation and Name: Establishes the company's legal formation and approved name

5. Company Purpose: Details permitted business activities and objectives

6. Capital and Shares: Specifies registered capital, share distribution, and value

7. Share Transfer Restrictions: Sets rules for transferring shares and pre-emptive rights

8. Management Structure: Defines management roles, appointment process, and powers

9. Partners' Meetings: Establishes procedures for general and extraordinary meetings

10. Financial Matters: Covers accounting, auditing, and financial year requirements

11. Profit and Loss Distribution: Details how profits and losses are allocated

12. Duration and Termination: Specifies company term and conditions for termination

13. Confidentiality: Establishes confidentiality obligations

14. Governing Law and Disputes: Specifies Saudi law governance and dispute resolution

15. Notices: Details how official communications should be made

16. General Provisions: Includes standard boilerplate clauses

Optional Sections

1. Foreign Investment Provisions: Required when any partner is a foreign entity, addressing SAGIA requirements

2. Shariah Compliance: Specific provisions ensuring compliance with Islamic law principles

3. Intellectual Property Rights: Required when IP is a significant company asset

4. Non-Competition: Restrictions on partners' competing activities

5. Tag-Along and Drag-Along Rights: Advanced share transfer provisions for sophisticated investors

6. Reserved Matters: Special voting rights or veto powers for certain partners

7. Employee Share Scheme: If the company plans to offer shares to employees

8. Branch Offices: Provisions for establishing branch offices or subsidiaries

Suggested Schedules

1. Schedule 1: Share Capital Details: Detailed breakdown of shareholding structure and contributions

2. Schedule 2: Business Plan: Initial business plan and objectives

3. Schedule 3: Management Procedures: Detailed procedures for management operations

4. Schedule 4: Shareholder Information: Detailed information about each shareholder

5. Schedule 5: Articles of Association: Standard form Articles required by Saudi law

6. Schedule 6: Powers of Attorney: Format for any required powers of attorney

7. Appendix A: Key Business Licenses: Copies of essential permits and licenses

8. Appendix B: Company Policies: Key internal policies and procedures

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 of Managers
Business Day
Business Plan
Capital
Companies Law
Company
Confidential Information
Control
Effective Date
Encumbrance
Event of Default
Exit Event
Financial Year
General Assembly
General Manager
Governmental Authority
Group
Intellectual Property Rights
Law
License
Management Committee
Manager
Ministry of Commerce
Partners
Partnership Interest
Permitted Transferee
Pre-emptive Rights
Profits
Quarter
Registered Office
Related Party
Reserved Matters
SAGIA
Saudi Arabia
Share
Share Capital
Shareholder
Shareholder Resolution
Shariah
Statutory Reserve
Subsidiary
Tag-Along Rights
Transfer
Voting Rights
ZATCA
Zakat
Clauses
Interpretation
Formation and Registration
Company Name
Company Purpose
Duration
Share Capital
Share Transfer
Pre-emptive Rights
Management Powers
Board Composition
General Assembly Meetings
Voting Rights
Reserved Matters
Capital Increase
Capital Decrease
Financial Statements
Dividends Distribution
Statutory Reserve
Partner Obligations
Confidentiality
Non-Competition
Intellectual Property
Related Party Transactions
Tag-Along Rights
Drag-Along Rights
Default
Termination
Liquidation
Dispute Resolution
Governing Law
Force Majeure
Notices
Amendment
Shariah Compliance
Foreign Investment
Tax and Zakat
Regulatory Compliance
Assignment
Severability
Entire Agreement
Good Faith
Costs and Expenses
Further Assurance
Relevant Industries

Retail

Manufacturing

Technology

Professional Services

Real Estate

Construction

Healthcare

Education

Food and Beverage

Transportation and Logistics

Financial Services

Consulting

Import/Export

Energy

Tourism

Relevant Teams

Legal

Corporate Governance

Compliance

Finance

Risk Management

Operations

Corporate Affairs

Business Development

Investment

Board Secretariat

Executive Leadership

Shareholder Relations

Relevant Roles

Chief Executive Officer

Managing Director

Legal Counsel

Corporate Secretary

Chief Financial Officer

Compliance Officer

Risk Manager

Business Development Manager

Operations Director

Board Member

Company Director

Investment Manager

Shareholder Relations Manager

General Counsel

Corporate Governance Officer

Industries
Companies Law (2015): The primary legislation governing company formation, structure, and operations in Saudi Arabia, including specific provisions for Limited Liability Companies (Articles 151-180)
Foreign Investment Law: Regulates foreign participation in Saudi companies, including ownership restrictions and licensing requirements through SAGIA (Saudi Arabian General Investment Authority)
Commercial Registration Law: Governs the registration requirements and procedures for companies operating in Saudi Arabia
Anti-Money Laundering Law: Stipulates compliance requirements for company formation and operations to prevent money laundering
Value Added Tax (VAT) Law: Establishes tax obligations and requirements for companies operating in Saudi Arabia
Zakat, Tax and Customs Authority (ZATCA) Regulations: Governs Zakat (Islamic tax) requirements for Saudi companies and income tax for foreign shareholders
Ministry of Commerce and Investment Regulations: Provides detailed requirements for company formation, governance, and ongoing compliance
Saudi Labor Law: Regulates employment relationships and worker rights, relevant for company operations and management
Commercial Courts Law: Governs dispute resolution and legal proceedings related to commercial matters including company disputes
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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