LLC Shareholder Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

LLC Shareholder Agreement

"I need an LLC Shareholder Agreement for a Saudi Arabian technology startup with three individual shareholders and one corporate investor, including specific provisions for future funding rounds and tech IP protection, to be implemented by March 2025."

Document background
The LLC Shareholder Agreement is a crucial document used when establishing or updating the governance framework for Limited Liability Companies in Saudi Arabia. It becomes necessary when two or more parties wish to formalize their relationship as shareholders, define their rights and obligations, and establish clear operational guidelines for the company. This agreement must comply with the Saudi Companies Law 2015, relevant Ministry of Commerce regulations, and Sharia principles. It typically includes detailed provisions on share ownership, management rights, profit distribution, share transfer restrictions, and dispute resolution mechanisms. The document is particularly important in the Saudi context as it helps bridge the gap between statutory requirements and practical business needs while providing clarity on governance matters not fully addressed in the standard Articles of Association.
Suggested Sections

1. Parties: Identification of all shareholders and the company, including their full legal names and addresses

2. Background: Context of the agreement, company formation details, and purpose of the arrangement

3. Definitions and Interpretation: Defined terms used throughout the agreement and rules of interpretation

4. Share Capital and Shareholders: Details of share capital, shareholding percentages, and classes of shares

5. Management and Decision Making: Governance structure, manager appointments, and decision-making processes

6. Shareholders' Meetings: Procedures for general assemblies, voting rights, and meeting requirements

7. Transfer of Shares: Share transfer restrictions, right of first refusal, and transfer procedures

8. Pre-emptive Rights: Rights of existing shareholders in new share issuances

9. Deadlock Resolution: Procedures for resolving fundamental disagreements between shareholders

10. Dividend Policy: Rules governing profit distribution and dividend declarations

11. Reserved Matters: Actions requiring special shareholder approval

12. Confidentiality: Obligations regarding company and shareholder information

13. Term and Termination: Duration of the agreement and termination circumstances

14. Governing Law and Dispute Resolution: Applicable law and dispute resolution mechanisms

Optional Sections

1. Tag-Along Rights: Include when minority shareholder protection is required for share sales

2. Drag-Along Rights: Include when majority shareholders may need to force minority participation in a sale

3. Put and Call Options: Include when shareholders want specific share purchase/sale rights

4. Non-Competition and Non-Solicitation: Include when shareholders are involved in similar businesses

5. Intellectual Property Rights: Include when the company has significant IP assets

6. Emergency Funding Provisions: Include when additional capital contributions might be needed

7. Shareholder Services: Include when shareholders will provide services to the company

8. Exit Strategy: Include when specific exit mechanisms are planned

9. Shariah Compliance: Include detailed provisions when strict Shariah compliance is required

Suggested Schedules

1. Schedule 1 - Details of the Company: Company registration details, address, and commercial registration information

2. Schedule 2 - Initial Shareholders and Shareholding: List of shareholders with their respective shareholdings and capital contributions

3. Schedule 3 - Reserved Matters: Detailed list of decisions requiring special approval

4. Schedule 4 - Business Plan: Initial business plan and key objectives

5. Schedule 5 - Articles of Association: Copy of or reference to the company's Articles of Association

6. Schedule 6 - Deed of Adherence: Template for new shareholders joining the agreement

7. Schedule 7 - Share Valuation Methodology: Agreed method for valuing shares in transfer scenarios

8. Schedule 8 - Key Management Positions: Description of key management roles and appointment rights

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

Real Estate

Manufacturing

Technology

Retail

Professional Services

Healthcare

Construction

Hospitality

Trading

Education

Logistics

Financial Services

Consulting

Energy

Telecommunications

Relevant Teams

Legal

Corporate Governance

Executive Leadership

Finance

Compliance

Risk Management

Corporate Affairs

Investment

Business Development

Board Secretariat

Relevant Roles

CEO

Managing Director

Legal Counsel

Corporate Secretary

Chief Financial Officer

Compliance Officer

Board Member

General Counsel

Investment Manager

Business Development Director

Company Manager

Shareholder Relations Manager

Risk Manager

Corporate Governance Officer

Legal 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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