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The Co-Founder Equity Agreement is a crucial document for any new business venture in the United Arab Emirates, particularly relevant when two or more individuals join forces to establish a company. This agreement is essential in the UAE business context, where clear documentation of ownership and responsibilities is required for company registration and ongoing compliance. The document typically covers equity distribution, vesting schedules, roles and responsibilities, decision-making processes, and exit provisions, all aligned with UAE Federal Law No. 32 of 2021 and relevant free zone regulations where applicable. It's particularly important given the UAE's unique business environment, which includes mainland and free zone jurisdictions, each with specific requirements for company formation and ownership structures. The agreement serves as a foundational document that helps prevent future disputes and provides clear guidelines for company governance.

1. Parties: Identification of all co-founders and the company, including full legal names, addresses, and emirates ID numbers

2. Background: Context of the agreement, including company formation details, business purpose, and relationship between co-founders

3. Definitions: Defined terms used throughout the agreement, including technical, financial, and legal terminology

4. Equity Allocation: Detailed breakdown of initial share distribution, share classes, and vesting schedules if applicable

5. Capital Contributions: Specification of initial and future capital contributions, including cash, assets, or services

6. Roles and Responsibilities: Defined roles, commitments, and responsibilities of each co-founder

7. Decision Making: Governance structure, voting rights, and decision-making processes

8. Transfer Restrictions: Limitations on share transfers, including right of first refusal and tag-along/drag-along rights

9. Intellectual Property: Assignment and ownership of IP rights, including pre-existing IP and future developments

10. Confidentiality: Protection of company and co-founder confidential information

11. Non-Compete and Non-Solicitation: Restrictions on competitive activities and solicitation of employees/customers

12. Termination: Circumstances and processes for termination of co-founder relationship

13. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability