Shareholders Agreement in the UAE: Template and Key Clauses (2026)

A shareholders agreement in the UAE is a private contract among the owners of a company, and often the company itself, that sets out how they will run and share control of the business. It sits alongside the company's constitutional documents, the memorandum and articles of association, and covers what those leave out or keep private: board composition, which decisions need special approval, how shares can move, and what happens if the owners fall out. For any company with more than one owner, it is the document that prevents most serious disputes. This is general information, not legal advice. UAE rules differ between the mainland and the free zones, and the law changes, so confirm the current position before relying on a clause. ## How it works with the memorandum A UAE company is formed under the Commercial Companies Law (for mainland companies) or under the rules of the relevant free zone, with a memorandum and articles of association as its public constitutional document. The shareholders agreement is a separate private contract that adds the commercial deal on top. Where the two can conflict, a well drafted shareholders agreement states which document prevails between the parties, and the memorandum is often amended to match. In the DIFC and ADGM free zones, which use common-law frameworks, shareholders agreements work much as they do in other common-law systems; on the mainland, some protections must be reflected in the memorandum itself to be effective against third parties. <!-- [VERIFY] current UAE Commercial Companies Law decree reference and which protections must sit in the memorandum before citing specifics --> ## A clause by clause skeleton Use this as a structure to adapt, not a finished document. ``` SHAREHOLDERS AGREEMENT Parties: [each Shareholder] and [the Company] Date: [date] 1. SHARES AND CAPITAL The current shareholding is in Schedule 1. New shares are issued only as allowed in clause [x]. 2. BUSINESS The Company's business is [description], not changed materially without approval under clause 4. 3. BOARD AND MANAGEMENT The board has [number] managers/directors. [Shareholder] may appoint [number]. Day to day management rests with [the board / a general manager]. 4. RESERVED MATTERS These decisions need approval of [percentage / named shareholders]: changing the business, issuing shares, borrowing above [amount], related-party deals, selling the company, [others]. 5. ISSUE OF NEW SHARES (PRE-EMPTION) New shares are first offered to existing shareholders in proportion to their holdings. 6. TRANSFER OF SHARES A shareholder wishing to sell first offers the shares to the others (right of first refusal). Other transfers need approval under clause 4. 7. TAG-ALONG AND DRAG-ALONG If a majority sells, minority holders may join on the same terms (tag-along). A qualifying majority may require the rest to sell on the same terms (drag-along). 8. DIVIDENDS The dividend policy is [description], subject to the Company's needs and the Commercial Companies Law. 9. DEADLOCK If the shareholders cannot agree on a reserved matter, the parties will [escalate / mediate / use a buy-sell mechanism] under clause [x]. 10. RESTRICTIVE COVENANTS Shareholders active in the business do not compete or solicit during their involvement and for [period] after, so far as enforceable. 11. EXIT The parties intend [an eventual sale / listing]. Exit and valuation provisions are in clause [x]. 12. GOVERNING LAW AND DISPUTES Governed by [UAE federal law / a named free-zone law]. Disputes resolved by [arbitration seated in [DIFC / ADGM / DIAC] / the courts of [emirate]]. Schedule 1: Shareholding

- **Foreign ownership.** Ownership rules have changed in recent years; confirm what applies to your activity and emirate.
- **Enforcement forum.** Choose arbitration or a court deliberately, matching where the company and assets are.
- **Arabic and notarisation.** Mainland constitutional documents may need Arabic versions and notarisation. <!-- [VERIFY] current Arabic-language and notarisation requirements for mainland shareholder documents before stating them as mandatory --> ## Common mistakes to avoid - Relying only on a standard memorandum, which usually does not cover reserved matters, drag-along or deadlock.
- Putting protections only in the shareholders agreement when, on the mainland, some need to sit in the memorandum to bind outsiders.
- Forgetting pre-emption, letting a majority dilute a minority.
- No deadlock mechanism in a 50/50 company, the most common cause of a frozen business.
- Choosing a governing law or forum that does not match where the company and its assets actually are. ## Keeping the agreement and the cap table together A shareholders agreement is a living document. It changes with each funding round, new investor and share transfer, and must stay in step with the memorandum and the share register. When these live in separate files and inboxes, it becomes unclear who owns what and which version of the deal is current. Drafting an agreement like this, checking a reserved-matters or transfer clause against the memorandum, editing a term in plain language and holding every version with its date can live in one AI workspace tuned to how your company contracts. Adira is built around that single workspace, running on Claude, with per-seat pricing shown up front and a 7-day trial, India-first and built to work across jurisdictions. You can see more at [adiralaw.com](https://adiralaw.com). For a simple two-owner company the skeleton above is enough on its own. The point worth taking is that the agreement, the memorandum and the cap table are easier to trust when they stay in one place and in step.