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Pre Partnership Agreement for Saudi Arabia

Pre Partnership Agreement Template for Saudi Arabia

A Pre Partnership Agreement under Saudi Arabian law is a preliminary legal document that outlines the intended terms and conditions for a future business partnership between two or more parties. The document is governed by Saudi Companies Law and must comply with Sharia principles, making it unique to the Saudi jurisdiction. It establishes the framework for due diligence, defines exclusivity periods, and sets out the conditions precedent for forming the final partnership. The agreement typically includes provisions for regulatory compliance, capital structure, and business objectives while addressing both local and international partnership requirements within the Saudi legal context.

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What is a Pre Partnership Agreement?

The Pre Partnership Agreement serves as a crucial preliminary document in Saudi Arabia's business landscape, used when parties are seriously considering forming a business partnership but need to establish formal terms for their negotiations and due diligence process. This document is particularly important in the Saudi context due to the specific requirements of the Saudi Companies Law, foreign investment regulations, and Sharia compliance considerations. It typically precedes the formation of a full partnership agreement and includes essential provisions such as exclusivity periods, confidentiality obligations, and preliminary business terms. The Pre Partnership Agreement is especially relevant for cross-border transactions where foreign entities need to ensure compliance with Saudi regulations before committing to a full partnership structure.

What sections should be included in a Pre Partnership Agreement?

1. Parties: Identification of all potential partners, including full legal names, addresses, and registration details

2. Background: Context of the proposed partnership, including the business opportunity and rationale for collaboration

3. Definitions: Key terms used throughout the agreement, including Arabic terms where relevant

4. Purpose and Scope: Detailed description of the proposed partnership's business activities and objectives

5. Due Diligence: Framework for conducting mutual due diligence investigations

6. Proposed Partnership Structure: Outline of intended partnership type, ownership structure, and capital contributions

7. Regulatory Compliance: Requirements for compliance with Saudi Companies Law and other relevant regulations

8. Conditions Precedent: Conditions that must be satisfied before proceeding with the formal partnership

9. Exclusivity: Terms preventing parties from negotiating with other potential partners during the specified period

10. Confidentiality: Obligations regarding the protection of confidential information exchanged during negotiations

11. Costs and Expenses: Allocation of costs incurred during the pre-partnership phase

12. Term and Termination: Duration of the pre-partnership agreement and circumstances for early termination

13. Governing Law and Jurisdiction: Confirmation of Saudi law as governing law and specification of dispute resolution mechanisms

What sections are optional to include in a Pre Partnership Agreement?

1. Foreign Investment Provisions: Required when any party is a foreign entity, detailing compliance with SAGIA requirements

2. Sharia Compliance: Specific section needed when financing or profit-sharing arrangements must be explicitly Sharia-compliant

3. Industry-Specific Requirements: Additional provisions for regulated industries like financial services or healthcare

4. Intellectual Property Rights: Required when IP will be shared or developed during the pre-partnership phase

5. Employee Matters: Needed when discussing potential transfer or hiring of employees in the proposed partnership

6. Real Estate Arrangements: Required when the partnership will involve property acquisition or leasing

7. Technology Transfer: Necessary when technology or know-how transfer is part of the proposed partnership

What schedules should be included in a Pre Partnership Agreement?

1. Business Plan: Preliminary business plan for the proposed partnership

2. Capital Structure: Detailed breakdown of proposed capital contributions and ownership percentages

3. Due Diligence Requirements: Checklist of required documentation and information for due diligence

4. Timeline: Proposed timeline for completing pre-partnership activities and forming final partnership

5. Regulatory Requirements: List of required permits, licenses, and regulatory approvals

6. Key Personnel: Details of key management and technical personnel to be involved in the partnership

7. Asset Schedule: List of assets to be contributed to the partnership by each party

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

Cost

Free to use
Relevant legal definitions






































Clauses
































Relevant Industries

Manufacturing

Technology

Real Estate

Financial Services

Healthcare

Education

Construction

Retail

Energy

Tourism

Transportation

Agriculture

Mining

Professional Services

Telecommunications

Relevant Teams

Legal

Business Development

Corporate Development

Strategy

Finance

Compliance

Risk Management

Commercial

Investment

Operations

Relevant Roles

Chief Executive Officer

Managing Director

Business Development Manager

Legal Counsel

Corporate Lawyer

Chief Financial Officer

Investment Manager

Strategy Director

Partnership Manager

Compliance Officer

Due Diligence Specialist

Board Member

Commercial Director

General Counsel

Business Development 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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