Share Ownership Agreement Template for Saudi Arabia

The Share Ownership Agreement is a vital document used when establishing or modifying shareholder relationships in companies operating under Saudi Arabian jurisdiction. This agreement becomes essential in various scenarios, including company formation, introduction of new shareholders, restructuring of ownership, or formalizing existing shareholder arrangements. The document must comply with Saudi Companies Law, Capital Market Authority regulations, and Sharia principles, making it distinct from similar agreements in other jurisdictions. It typically includes detailed provisions on share transfers, corporate governance, profit distribution, and shareholder rights, while considering specific Saudi requirements such as foreign ownership restrictions and local corporate governance standards. The Share Ownership Agreement is particularly important given Saudi Arabia's evolving business landscape under Vision 2030, which has introduced new considerations for both local and foreign investors.

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

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

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Share Ownership Structure: Details of shareholding percentages, share classes, and nominal values

5. Consideration and Payment: Payment terms for shares, including timing and method of payment

6. Shareholders' Rights and Obligations: Core rights and duties of shareholders, including voting rights and dividend entitlements

7. Transfer Restrictions: Limitations on share transfers and required procedures under Saudi law

8. Pre-emptive Rights: Right of first refusal for existing shareholders when shares are being sold

9. Management and Corporate Governance: Decision-making processes, board composition, and shareholder meetings

10. Dividend Policy: Rules for distribution of profits and declaration of dividends

11. Reserved Matters: Decisions requiring special majority or unanimous shareholder approval

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

13. Confidentiality: Obligations regarding company and shareholder information

14. Term and Termination: Duration of agreement and circumstances for termination

15. Governing Law and Dispute Resolution: Application of Saudi law and dispute resolution mechanisms