Share Retention Agreement

Share Retention Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

"I need a Share Retention Agreement for our UAE-based technology company where three founding shareholders (collectively holding 65% of shares) must retain their full shareholding until March 2025, with permitted transfers only allowed between family members and their personal holding companies."

Document background

Share Retention Agreements are essential legal instruments in the UAE corporate landscape, particularly during significant corporate transactions, IPO preparations, or strategic restructuring. This document type is commonly used when companies need to ensure stability in their ownership structure, maintain regulatory compliance, or satisfy investor requirements. A Share Retention Agreement typically includes detailed provisions on retention periods, transfer restrictions, and enforcement mechanisms, all structured to comply with UAE Federal Law No. 32 of 2021 and relevant free zone regulations where applicable. The agreement is particularly crucial in contexts such as post-merger integration, employee share schemes, or family business succession planning, where maintaining consistent ownership is vital for business continuity and stakeholder confidence.

Suggested Sections

1. Parties: Identification of the parties entering into the agreement, including the shareholder(s) subject to retention obligations and the company

2. Background: Context of the agreement, including company details, shareholding structure, and purpose of the retention requirements

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Retention Obligation: Core provisions detailing the shares subject to retention and the specific restrictions on transfer

5. Duration of Retention: Period during which the retention obligations remain in effect, including any trigger events for expiry

6. Permitted Transfers: Specific circumstances under which transfers may be permitted despite the retention obligations

7. Company Obligations: Company's responsibilities regarding share certificates, register maintenance, and transfer restrictions

8. Representations and Warranties: Key statements and guarantees by the parties regarding their capacity and authority

9. Events of Default: Circumstances constituting breach and their consequences

10. Remedies: Available remedies in case of breach, including specific performance and damages

11. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts' jurisdiction

Optional Sections

1. Tag-Along Rights: Include when certain shareholders should have the right to join in any permitted transfer of shares

2. Drag-Along Rights: Include when majority shareholders should have the right to force minority shareholders to join in a sale

3. Put and Call Options: Include when parties want to establish specific share purchase rights after the retention period

4. Non-Competition and Confidentiality: Include when additional restrictions on shareholder activities are required

5. Tax Provisions: Include when there are specific tax implications that need to be addressed

6. Free Zone Specific Provisions: Include when the company is established in a UAE free zone

7. Foreign Ownership Provisions: Include when dealing with foreign shareholders and UAE foreign ownership restrictions

Suggested Schedules

1. Schedule 1 - Share Details: Detailed information about the shares subject to retention, including share certificates numbers and shareholding percentages

2. Schedule 2 - Deed of Adherence: Form of deed for new shareholders to agree to be bound by the retention obligations

3. Schedule 3 - Company Information: Detailed company information including registration details, share capital, and current shareholding structure

4. Schedule 4 - Transfer Notice: Form of notice required for any permitted transfers

5. Appendix A - Board Resolutions: Copy of board resolutions approving the share retention arrangements

6. Appendix B - Shareholders' Resolution: Copy of shareholders' resolution approving the share retention arrangements

Authors

Alex Denne

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Financial Services

Technology

Real Estate

Healthcare

Manufacturing

Professional Services

Energy

Telecommunications

Family Business

Private Equity

Venture Capital

Infrastructure

Retail and Consumer

Media and Entertainment

Relevant Teams

Legal

Corporate Governance

Compliance

Finance

Executive Management

Board Secretariat

Investor Relations

Risk Management

Corporate Affairs

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Compliance Officer

Investment Director

Board Member

Managing Director

Shareholder Relations Manager

Corporate Governance Officer

Risk Management Officer

Strategy Director

M&A Director

Company Registrar

General Counsel

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