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Company Separation Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Company Separation Agreement

"I need a Company Separation Agreement for two UAE mainland companies in the manufacturing sector, where Company A will retain the production facility and Company B will take over the distribution network, with the separation to be completed by March 2025."

Document background
The Company Separation Agreement serves as a crucial legal instrument in the UAE business landscape when two or more business entities decide to part ways and operate independently. This document is essential for companies operating under UAE Federal Law No. 32 of 2021 and related regulations, whether in mainland UAE or Free Zones. It becomes necessary during corporate restructuring, joint venture dissolutions, or strategic business separations. The agreement comprehensively addresses asset division, employee transfers, intellectual property rights, ongoing obligations, and compliance requirements specific to UAE law. It includes provisions for Sharia compliance where relevant and incorporates necessary approvals from relevant authorities such as the Department of Economic Development or Free Zone authorities.
Suggested Sections

1. Parties: Identification of all parties involved in the separation, including full legal names, registration numbers, and registered addresses

2. Background: History of the business relationship, current corporate structure, and reasons for separation

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Effective Date and Timeline: Specific date when the separation becomes effective and timeline for completing various separation activities

5. Asset Division: Detailed breakdown of how company assets will be divided, including physical assets, intellectual property, and contracts

6. Financial Settlement: Terms of financial separation, including payment obligations, debt allocation, and settlement of accounts

7. Employee Matters: Arrangements for employee transfers, benefits, and related obligations in compliance with UAE Labor Law

8. Intellectual Property Rights: Division and future usage rights of intellectual property, trademarks, and trade names

9. Confidentiality: Obligations regarding confidential information and trade secrets post-separation

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

11. Representations and Warranties: Standard representations and warranties from each party

12. Tax Matters: Allocation of tax liabilities and responsibilities

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

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

Optional Sections

1. Transition Services: Required when one party needs to provide operational support to the other for a period post-separation

2. Customer Communication: Include when there's a need to manage customer relationships and communications about the separation

3. Government Approvals: Required when the separation needs specific regulatory or government approvals

4. Islamic Finance Compliance: Required when the separation involves Sharia-compliant financial arrangements

5. Free Zone Requirements: Include when either party operates within a UAE Free Zone

6. Environmental Matters: Required when the separation involves transfer of environmental liabilities or permits

7. Parent Company Guarantees: Include when parent company guarantees are needed for ongoing obligations

Suggested Schedules

1. Schedule 1 - Asset List: Detailed inventory of all assets being divided, including valuations

2. Schedule 2 - Intellectual Property Register: Complete list of IP rights and their allocation between parties

3. Schedule 3 - Employee Transfer List: List of employees to be transferred and their terms of employment

4. Schedule 4 - Contracts Assignment: List of contracts to be assigned or terminated, including customer and supplier agreements

5. Schedule 5 - Financial Settlement Terms: Detailed breakdown of financial settlements, including payment schedules

6. Schedule 6 - Transition Services Agreement: Details of any transition services to be provided post-separation

7. Schedule 7 - Property Rights: Details of real estate and property rights allocation

8. Appendix A - Corporate Documents: Copies of relevant corporate documents and certificates

9. Appendix B - Government Approvals: Copies of required government and regulatory approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

























































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Relevant Industries

Manufacturing

Trading

Professional Services

Technology

Real Estate

Construction

Financial Services

Healthcare

Retail

Hospitality

Energy

Logistics

Media and Entertainment

Telecommunications

Relevant Teams

Legal

Finance

Human Resources

Operations

Compliance

Risk Management

Corporate Governance

Business Development

Strategy

Corporate Communications

Information Technology

Facilities Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

Corporate Secretary

Managing Director

Board Member

Finance Director

Legal Director

Operations Director

Human Resources Director

Compliance Officer

Risk Manager

Business Development Director

Company Secretary

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

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