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Company Contract Agreement for Saudi Arabia

Company Contract Agreement Template for Saudi Arabia

A comprehensive legal document governed by Saudi Arabian law that establishes the formation, structure, and governance of a company. This agreement outlines the relationships between shareholders, management responsibilities, capital structure, and operational framework while ensuring compliance with both the Saudi Companies Law and Sharia principles. It includes essential provisions for corporate governance, share transfers, profit distribution, and dispute resolution mechanisms, all specifically tailored to meet Saudi Arabian legal requirements and business practices.

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What is a Company Contract Agreement?

The Company Contract Agreement serves as the foundational document for establishing and operating a company in Saudi Arabia. It is essential for both local and foreign investors seeking to formalize their business presence in the Kingdom. This document must comply with the Saudi Companies Law, Foreign Investment Law (where applicable), and Sharia principles. The agreement covers crucial aspects such as capital requirements, shareholding structures, management frameworks, and operational procedures. It is particularly important as it forms the basis for obtaining necessary government approvals and licenses. The document needs regular review and updating to ensure continued compliance with evolving Saudi regulations and business requirements.

What sections should be included in a Company Contract Agreement?

1. Parties: Identification of all contracting parties, including full legal names, commercial registration numbers, and authorized representatives

2. Background: Context of the agreement, including the purpose of forming the company and brief description of each party's role

3. Definitions: Detailed definitions of terms used throughout the agreement to ensure clarity and prevent misinterpretation

4. Company Formation: Details of the company's legal form, name, and registration requirements under Saudi law

5. Business Purpose: Specific description of permitted business activities aligned with Saudi commercial regulations

6. Capital and Shares: Details of company capital, share distribution, and payment terms in accordance with Saudi Companies Law

7. Management Structure: Governance framework, appointment of managers/board, and decision-making processes

8. Shareholders' Rights and Obligations: Detailed rights, responsibilities, and obligations of shareholders

9. General Assembly: Procedures for shareholder meetings, voting rights, and quorum requirements

10. Financial Matters: Financial management, accounting practices, and profit distribution policies

11. Transfer of Shares: Procedures and restrictions for share transfers, including pre-emptive rights

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

13. Confidentiality: Protection of company and shareholder confidential information

14. Dispute Resolution: Mechanisms for resolving disputes, including reference to Saudi courts or arbitration

15. Governing Law: Explicit statement of Saudi law as governing law and Sharia compliance

What sections are optional to include in a Company Contract Agreement?

1. Foreign Investment Provisions: Required when any shareholder is non-Saudi, addressing SAGIA requirements and foreign investment regulations

2. Intellectual Property Rights: Needed when the company will develop or use significant IP assets

3. Non-Competition: Include when shareholders or key personnel should be restricted from competing activities

4. Tag-Along Rights: Optional protection for minority shareholders in case of majority share sale

5. Drag-Along Rights: Optional provision allowing majority shareholders to force minority participation in a sale

6. Dead-Lock Resolution: Important for 50-50 joint ventures or where major decisions require unanimous consent

7. Put and Call Options: Include when shareholders want pre-agreed exit mechanisms

8. Employee Share Scheme: Required if the company plans to offer shares to employees

9. Shariah Compliance Committee: Needed for companies requiring ongoing Shariah compliance monitoring

What schedules should be included in a Company Contract Agreement?

1. Schedule 1: Shareholder Information: Detailed information about each shareholder, including contact details and shareholding percentages

2. Schedule 2: Business Plan: Initial business plan and strategic objectives of the company

3. Schedule 3: Capital Contributions: Detailed breakdown of initial capital contributions and payment schedule

4. Schedule 4: Reserved Matters: List of decisions requiring special majority or unanimous approval

5. Schedule 5: Key Management Positions: Description of key management roles and initial appointees

6. Appendix A: Articles of Association: Full text of the company's Articles of Association conforming to Saudi Companies Law

7. Appendix B: Shareholders' Resolution: Initial shareholders' resolutions required for company formation

8. Appendix C: Required Licenses: List of necessary permits and licenses for company operations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Service Agreement

Cost

Free to use
Relevant legal definitions




























































Clauses















































Relevant Industries

Manufacturing

Technology

Real Estate

Healthcare

Financial Services

Retail

Construction

Energy

Telecommunications

Professional Services

Hospitality

Education

Transportation and Logistics

Mining and Materials

Agriculture

Entertainment

Relevant Teams

Legal

Corporate Governance

Compliance

Finance

Executive Leadership

Board Secretariat

Risk Management

Corporate Affairs

Investment

Business Development

Shareholder Relations

Regulatory Affairs

Relevant Roles

Chief Executive Officer

Chief Legal Officer

Legal Director

Corporate Secretary

Managing Director

Board Members

Compliance Officer

Chief Financial Officer

Investment Manager

Business Development Director

Corporate Governance Officer

Shareholders

General Counsel

Company Registrar

Risk Management Officer

Legal 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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