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Co Sale Agreement for United Arab Emirates

Co Sale Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes and regulates tag-along rights for shareholders, particularly protecting minority shareholders' interests. The document sets out the mechanisms by which minority shareholders can participate in share sales initiated by majority shareholders, ensuring they receive the same terms and conditions. It operates within the framework of UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and related regulations, incorporating specific UAE legal requirements for share transfers and corporate governance.

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Co Sale Agreement

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What is a Co Sale Agreement?

The Co-Sale Agreement serves as a crucial instrument in UAE corporate governance, designed to protect minority shareholder interests in private companies. This document becomes particularly relevant when companies seek to establish clear protocols for share transfers and exits, especially in scenarios involving potential acquisitions or strategic sales. Under UAE law, specifically Federal Law No. 32 of 2021 and related regulations, the agreement provides minority shareholders with the right to join in the sale of shares when majority shareholders decide to sell their stakes. The agreement typically includes detailed provisions on valuation mechanisms, notice requirements, and transfer procedures, all aligned with UAE legal requirements. It's commonly used in startup ecosystems, family businesses, and corporate joint ventures where protecting minority interests is paramount while maintaining corporate flexibility for strategic transactions.

What sections should be included in a Co Sale Agreement?

1. Parties: Identification of all parties to the agreement, including the majority shareholders, minority shareholders, and the company

2. Background: Context of the agreement, including the company's current shareholding structure and reason for implementing co-sale rights

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation

4. Co-Sale Rights: Core provisions detailing the tag-along rights, including triggering events and mechanics of the co-sale process

5. Notice Requirements: Procedures for notifying relevant parties of intended share sales and exercise of co-sale rights

6. Valuation Mechanism: Methods for determining the sale price of shares under the co-sale provision

7. Transfer Procedures: Detailed procedures for executing the share transfers when co-sale rights are exercised

8. Representations and Warranties: Standard representations and warranties from all parties

9. Covenants: Ongoing obligations of the parties

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Confidentiality: Provisions regarding the confidential treatment of information

12. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.

What sections are optional to include in a Co Sale Agreement?

1. Drag-Along Rights: Include when majority shareholders want the right to force minority shareholders to join in a sale

2. Right of First Refusal: Include when existing shareholders should have priority rights to purchase shares before they can be sold to third parties

3. Share Transfer Restrictions: Include when additional transfer restrictions beyond co-sale rights are needed

4. Put and Call Options: Include when parties want specific rights to force purchase or sale of shares under certain conditions

5. Management Provisions: Include when the agreement needs to address management rights and decisions

6. Exit Rights: Include when specific provisions for IPO or other exit scenarios are needed

7. Competing Business Restrictions: Include when non-compete provisions are required for selling shareholders

What schedules should be included in a Co Sale Agreement?

1. Schedule 1 - Current Shareholding Structure: Detailed breakdown of current shareholding including share classes and ownership percentages

2. Schedule 2 - Share Transfer Notice Form: Template for notifying other shareholders of intended share transfers

3. Schedule 3 - Deed of Adherence: Template document for new shareholders to become bound by the agreement

4. Schedule 4 - Valuation Principles: Detailed methodology for share valuation

5. Schedule 5 - Competing Business Definitions: Detailed description of what constitutes a competing business if relevant

6. Appendix A - Company Information: Key company details including registration number, address, and current directors

7. Appendix B - Relevant Corporate Approvals: Copies of board and shareholder resolutions approving the agreement

Authors

Alex Denne

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

Document Type

Sales Agreement

Sector

Sales

Cost

Free to use
Relevant legal definitions




















































Clauses








































Relevant Industries

Technology

Real Estate

Financial Services

Professional Services

Manufacturing

Healthcare

Retail

E-commerce

Telecommunications

Media and Entertainment

Energy

Construction

Hospitality

Education

Transportation and Logistics

Relevant Teams

Legal

Corporate Governance

Compliance

Finance

Executive Leadership

Investment

Risk Management

Corporate Affairs

Shareholder Relations

Business Development

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

Corporate Secretary

Legal Director

Investment Manager

Corporate Lawyer

Compliance Officer

Board Member

Managing Director

Shareholder Relations Manager

Private Equity Manager

Venture Capital Manager

Investment Director

Corporate Governance Officer

Risk Manager

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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