Questions & Answers
Assistance with the side agreement while establishing an LLC
Hi,
I'm starting a food import company in mainland UAE where my Emirati partner (a close friend) will have 20% and I will have 80%.
We're gonna take care of the company creation in DED and trade license application.
At which stage are we supposed to draft the ''side agreement'' and sign the power of attorney?
Can we create a company where I will have 49% of the shares and register it with DED and then draft the side agreement (80% - 20%) and power of attorney in a second step?
Thank you
Hello,
It's better to write and prepare the agreement from the beginning for both sides to protect your rights.
For more information please contact us on our email.
Hello,
I trust you are well.
As per the UAE mainland law, a local partner is required to own 51% of shares. However, an alternate Side Agreement can be implemented to reflect how profits and/or losses will be distributed.
We can assist you drafting both, the Side Agreement as well as the Power of Attorney which must be notarized by the Notary Public, prior to being legally effective and granting you authorization to execute the powers mentioned within it.
For further information, please contact us by email. Alternatively, you can message us on our phone number.
It is not possible to register the company with the Department of Economic Development unless the UAE partner’s share is 51% and your share is 49%.
Accordingly, you must prove your rights to make the original agreement and sign it from both of parties, as well as the power of attorney that should be signed at the same time that the company is registered with the Department of Economic Development.
Contact us by phone or email.
Thank you
Dear Questioner,
Pursuant to the query, the local partner should have 51% of the share, however, a POA can be made in favour of you authorizing you to have all in rights.
We can help you in preparing the document. Kindly contact us by phone or mail.
Thank you.
