Shareholders' Agreement

A shareholders' agreement is a private contract between a company's owners that sits alongside the memorandum and articles, governing matters the public documents do not: reserved matters requiring unanimous consent, board composition, deadlock resolution, exit mechanics (drag-along, tag-along, put and call options), vesting, non-competes and dividend policy. In the UAE it is especially important because notarised MOA templates are often standardised and thin — the real deal between founders and investors lives in the shareholders' agreement. Care is needed to keep it consistent with the registered MOA, since conflicts between the two create litigation risk, and certain mechanisms must be mirrored in registered documents to bind third parties. It typically includes a governing law and arbitration clause. It matters because partner disputes are among the most common UAE business conflicts, and the agreement decides who can sell, who can block, and how a deadlock ends. You meet it in funding rounds, joint ventures and any multi-founder setup.