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An Equity Agreement sets out how ownership stakes are divided and managed within a UAE company. It spells out each shareholder's rights, responsibilities, and percentage of ownership in the business, following UAE Commercial Companies Law requirements and free zone regulations.

Beyond just documenting who owns what, these agreements protect investor interests by covering crucial points like voting rights, profit sharing, transfer restrictions, and exit procedures. In UAE business practice, they're especially important when bringing in new partners or establishing joint ventures, as they help prevent future disputes while ensuring compliance with local ownership rules.

Use an Equity Agreement when setting up a new business partnership or bringing investors into your UAE company. This agreement becomes essential during funding rounds, joint ventures, or when restructuring ownership—particularly in free zones where specific ownership structures must comply with local regulations.

The timing matters most before money changes hands or operations begin. Implementing an Equity Agreement early helps prevent costly disputes by clearly defining ownership percentages, profit distribution, and decision-making rights. It's especially crucial in family businesses, tech startups, and professional service firms where multiple stakeholders share control.

• Simple Agreement For Future Equity: Used by UAE startups for quick, flexible funding rounds without immediate equity issuance
• Stock Purchase Agreement Private Company: Standard agreement for direct share purchases in private UAE companies
• Phantom Stock Agreement: Provides employee benefits linked to company value without actual share ownership
• Limited Partnership Agreement Private Equity: Structures investment funds with distinct roles for general and limited partners
• Subscription Agreement Private Equity: Documents terms for new investors joining private equity funds

• Company Founders: Initiate and sign Equity Agreements when establishing ownership structures or bringing in new partners
• Private Investors: Review and negotiate terms before providing capital, especially in UAE free zones
• Corporate Lawyers: Draft and review agreements to ensure compliance with UAE Commercial Companies Law
• Board Members: Approve and oversee implementation of equity distribution and voting rights
• Company Secretaries: Maintain records and handle administrative requirements for share transfers
• Financial Advisors: Guide valuation aspects and structure equity terms for maximum benefit

• Company Details: Gather trade license, shareholder information, and company registration documents from UAE authorities
• Ownership Structure: Map out exact shareholding percentages and any local ownership requirements
• Financial Terms: Document agreed valuation, investment amounts, and profit-sharing arrangements
• Governance Rights: Define voting powers, board representation, and management responsibilities
• Exit Provisions: Specify share transfer rules, tag-along rights, and dispute resolution procedures
• Compliance Check: Verify alignment with UAE Commercial Companies Law and relevant free zone regulations
• Document Generation: Use our platform to create a legally-sound agreement that includes all required elements

• Party Information: Full legal names, addresses, and Emirates ID numbers of all shareholders
• Share Details: Clear specification of share classes, numbers, and percentage ownership
• Consideration: Detailed payment terms and valuation methodology
• Transfer Restrictions: Rules for selling shares and right of first refusal provisions
• Management Rights: Decision-making powers and board representation rules
• UAE Compliance: Local ownership requirements and free zone regulations
• Exit Mechanisms: Put and call options, drag-along and tag-along rights
• Dispute Resolution: UAE court jurisdiction or DIFC arbitration provisions

While both documents deal with ownership stakes, an Equity Agreement differs significantly from a Equity Participation Agreement. Let's explore the key distinctions that matter in UAE business practice:

• Primary Purpose: Equity Agreements establish permanent ownership rights and governance structures, while Equity Participation Agreements often focus on profit-sharing without full ownership transfer
• Legal Status: Equity Agreements create direct shareholding relationships registered with UAE authorities, whereas Participation Agreements typically represent contractual rights only
• Control Rights: Equity Agreements include voting powers and management participation, while Participation Agreements usually limit involvement to financial benefits
• Exit Flexibility: Equity Agreements require formal share transfer procedures under UAE law, but Participation rights can often be terminated through simpler contractual mechanisms