Shareholders Agreement For Private Limited Company Template for Saudi Arabia

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Key Requirements PROMPT example:

Shareholders Agreement For Private Limited Company

"I need a Shareholders Agreement For Private Limited Company for my Saudi technology startup, which will have three shareholders: two Saudi nationals and one Singapore-based investor, with planned completion by March 2025. The agreement should include specific provisions for technology IP protection and future funding rounds."

Document background
The Shareholders Agreement For Private Limited Company is a fundamental document used when establishing or restructuring a private limited company in Saudi Arabia. It serves as the primary contract governing the relationship between shareholders, outlining their rights, responsibilities, and obligations while ensuring compliance with Saudi Companies Law and Sharia principles. This agreement is particularly crucial when multiple shareholders are involved, whether they are individuals or corporate entities, and provides essential frameworks for company management, share transfers, dispute resolution, and protection of minority interests. The document must align with Saudi Arabia's legal requirements, including foreign investment restrictions where applicable, and typically works in conjunction with the company's Articles of Association to provide a comprehensive governance structure.
Suggested Sections

1. Parties: Identifies all shareholders and the company, including full legal names, addresses, and registration details

2. Background: Outlines the company's establishment, business purpose, and shareholders' intention to regulate their relationship

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out interpretation rules

4. Share Capital and Shareholders: Details the company's share capital structure, shareholding percentages, and classes of shares

5. Management and Control: Establishes the board structure, appointment rights, and decision-making processes

6. Shareholder Meetings: Procedures for conducting shareholder meetings, voting rights, and quorum requirements

7. Reserved Matters: Lists decisions requiring special majority or unanimous shareholder approval

8. Share Transfer Restrictions: Rules governing the transfer of shares, including right of first refusal and tag-along rights

9. Dividend Policy: Sets out the approach to profit distribution and dividend declarations

10. Finance and Business Plan: Outlines capital requirements, funding obligations, and business planning processes

11. Deadlock Resolution: Mechanisms for resolving fundamental disagreements between shareholders

12. Confidentiality: Obligations regarding company and shareholder confidential information

13. Non-Competition: Restrictions on shareholders competing with the company

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

15. General Provisions: Standard legal provisions including governing law, notices, and amendments

Optional Sections

1. Shariah Compliance: Specific provisions ensuring compliance with Islamic law principles, required when the company operates in Shariah-sensitive sectors

2. Pre-emptive Rights: Rights of existing shareholders to maintain their percentage ownership in new share issuances, important for companies planning future capital increases

3. Put and Call Options: Rights to force purchase or sale of shares under specific circumstances, useful for joint ventures or strategic investments

4. Anti-dilution Protection: Protections against ownership dilution, important for minority shareholders or strategic investors

5. Intellectual Property Rights: Provisions regarding ownership and use of IP, essential for technology or brand-focused companies

6. Employee Share Scheme: Framework for employee share ownership, relevant when planning employee incentivization

7. Foreign Ownership Provisions: Special provisions required when foreign shareholders are involved, addressing compliance with Saudi foreign investment laws

Suggested Schedules

1. Schedule 1: Company Information: Detailed company information including registration details, address, and current directors

2. Schedule 2: Initial Shareholding Structure: Complete breakdown of share ownership, share classes, and rights attached to shares

3. Schedule 3: Reserved Matters List: Comprehensive list of decisions requiring special approval

4. Schedule 4: Business Plan: Initial business plan and key performance indicators

5. Schedule 5: Board Regulations: Detailed procedures for board meetings and decision-making

6. Schedule 6: Deed of Adherence: Template for new shareholders to become bound by the agreement

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

8. Appendix A: Key Management Positions: Description of key management roles and appointment rights

9. Appendix B: Form of Shareholders' Resolution: Template for shareholders' resolutions

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

Technology

Manufacturing

Real Estate

Healthcare

Retail

Professional Services

Construction

Food and Beverage

Education

Financial Services

Transportation

Energy

Tourism

Agriculture

Media and Entertainment

Relevant Teams

Legal

Corporate Governance

Board of Directors

Executive Leadership

Compliance

Finance

Corporate Affairs

Risk Management

Investment

Company Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Company Secretary

Board Director

Managing Director

Corporate Lawyer

Compliance Officer

Investment Manager

Business Development Director

Shareholder Relations Manager

Corporate Governance Officer

Risk Management Officer

Strategy Director

General Counsel

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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