Reserved Matters
The decisions that cannot be taken without minority consent, which is the core protection for a non controlling owner.
A memorandum of association satisfies the authorities. A shareholder agreement governs the relationship between the owners, and it is the document that matters when they stop agreeing.
Dubai Legal Expert drafts shareholder agreements for UAE companies, covering control, funding, distributions, deadlock, transfer restrictions and exit, and ensures the agreement works alongside the notarised constitutional documents.
The memorandum is the document filed with the authority and notarised, and it governs the company existence and basic structure. The shareholder agreement is a private contract between the owners, dealing with the commercial relationship in far more detail.
Where the two documents conflict, difficulties follow. We draft the agreement so that it complements the memorandum rather than contradicting it, and where the memorandum needs amendment to support the arrangement, that is identified at the outset.
Contact UsBoard composition, voting thresholds, reserved matters and the decisions requiring unanimous consent.
Capital contribution obligations, shareholder loans and the consequences of failing to fund.
Dividend and distribution policy, reinvestment requirements and the treatment of shareholder remuneration.
Pre emption, tag along, drag along, permitted transfers and valuation mechanics on exit.
Practical mechanisms so a disagreement does not permanently freeze the company.
The decisions that cannot be taken without minority consent, which is the core protection for a non controlling owner.
What happens when a shareholder cannot or will not fund, including dilution mechanics.
Escalation, expert determination and buy sell provisions so an equal split cannot freeze the business.
A defined valuation method, because disputes about how to value are as common as disputes about whether to sell.
Pre emption, tag and drag rights drafted so an exit proceeds in an orderly way.
The agreement drafted so it works with the notarised memorandum rather than against it.
When shareholders separate, they usually agree in principle that one will buy the other out. What they then spend years disputing is the price, because the agreement said the shares would be valued at fair value without saying how fair value is determined.
Specifying the method, the valuer, the appointment process where the parties cannot agree and the timeline removes that entire category of dispute. It takes a paragraph and it is one of the most valuable provisions in the document.
Understand the relationship, draft for the disagreement, align with the MOA.
We establish contributions, expectations, roles and how the shareholders intend the company to be run.
The memorandum and licence are reviewed to confirm what the agreement must align with.
The key commercial points are agreed in writing before full drafting, which shortens negotiation.
The agreement is drafted covering control, funding, distributions, deadlock, transfer and exit.
Terms are negotiated with the other shareholders and their advisers where required.
The agreement is executed and, where needed, the memorandum is amended and notarised to match.
We defined the valuation method at the drafting stage. Three years later that paragraph settled the entire buy out in a week.
The reserved matters list was the protection I did not know I needed as the minority owner.
Usually yes. The memorandum governs the company structure. The shareholder agreement governs the commercial relationship between owners in far more detail.
Decisions that cannot be taken without the consent of specified shareholders, which is the principal protection for a minority owner.
Conflicts create difficulty, which is why the agreement is drafted to align with the memorandum and the memorandum amended where necessary.
A mechanism resolving a stalemate between shareholders, such as escalation, expert determination or a buy sell arrangement.
By a method defined in the agreement, including who values, how they are appointed and the timeline, which prevents most valuation disputes.
The shareholder agreement is a private contract between the parties, unlike the memorandum which is filed with the authority.
The provisions nobody expects to use are the ones worth drafting carefully. The first consultation is free.
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