i. it reduces the share of the national shareholders of the company to less than 51% of the total shares of the company; or Although this type of agreement is usual in the United Arab Emirates, they are not favored. In case of strict interpretation of the Companies Act, these “ancillary agreements”, as they are called, are legally null and void. Indeed, in 2004, the Federal National Council of the United Arab Emirates passed Federal Law No. 17 of 2004 – Anti-Concealment (Fronting) – to combat the near-established practice of implementing ancillary agreements in commercial activities. The anti-fronting law provides that any agreement aimed at circumventing the property requirements of UAE laws is considered illegal and punishable by fines and possibly imprisonment. The Companies Act provides that the chartered accountants of a company are required to value the company if the shareholders cannot agree on a price for triggering the shareholders` subscription right. The parties should also be required, as part of the shareholders` agreement, to appoint an independent audit firm or an independent assessor who does not intend to carry out the assessment when an assessment event occurs. What is a partner`s contract? A shareholders` agreement is a document in which several shareholders of a company participate and describes the results and specific measures taken in the event of the departure of a shareholder from the company, whether voluntarily, involuntarily or if the company terminates trading. and if the essential dispute cannot be resolved within a reasonable time or through the mediation and arbitration provisions of this Agreement, any shareholder (the “Initiating Shareholder”) may initiate a forced purchase or sale agreement (the “Shot Gun Commission”).
It is important to note that there are important formal requirements that are set out in the Companies Act for the memorandum and articles of association (“memorandum”) of each LLC and for any subsequent amendments to the memorandum that modify its terms. These documents – which are themselves contracts between stakeholders – are often drafted in such a way that they adapt their terms to the material issues provided for in a shareholders` agreement or to include key aspects of those agreements. . . .