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Partnership Exit Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Partnership Exit Agreement

"I need a Partnership Exit Agreement under Saudi law for a three-partner professional services firm where one founding partner is retiring as of March 1, 2025, with a six-month transition period and ongoing consulting arrangements."

Document background
The Partnership Exit Agreement is a crucial document used when one or more partners decide to leave a business partnership in Saudi Arabia. It serves as the definitive record of the separation terms, ensuring compliance with both Saudi Companies Law and Sharia principles. This document becomes necessary when partners choose to part ways due to retirement, strategic disagreements, personal circumstances, or other business reasons. The agreement covers essential elements including financial settlements, asset distribution, liability allocation, and ongoing obligations. It must address specific Saudi regulatory requirements, including Ministry of Commerce registrations, professional licensing considerations, and tax/zakat implications. The document typically requires careful consideration of local business practices and customs, while ensuring that all parties' rights and obligations are clearly defined and protected under Saudi law.
Suggested Sections

1. Parties: Identification of all parties involved, including the exiting partner(s) and remaining partner(s)

2. Background: History of the partnership, reason for exit, and current partnership structure

3. Definitions: Key terms used throughout the agreement

4. Exit Date and Process: Specific date and detailed process for the partner's exit

5. Financial Settlement: Terms of financial settlement, including valuation method and payment terms

6. Transfer of Ownership: Process and terms for transferring the exiting partner's ownership interest

7. Release of Liabilities: Mutual release of future liabilities and ongoing obligations

8. Confidentiality: Ongoing confidentiality obligations post-exit

9. Non-Compete and Non-Solicitation: Restrictions on competitive activities and client/employee solicitation

10. Representations and Warranties: Standard representations about authority, ownership, and compliance

11. Tax and Regulatory Matters: Handling of tax liabilities and regulatory compliance requirements

12. Governing Law and Jurisdiction: Confirmation of Saudi law application and jurisdiction

13. Dispute Resolution: Process for resolving any disputes related to the exit

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

Optional Sections

1. Intellectual Property Rights: Required when IP ownership needs to be addressed in the exit

2. Employee Matters: Needed when the exit affects employment relationships or responsibilities

3. Ongoing Projects: Include when there are incomplete projects requiring transition arrangements

4. Client Transition: Required when specific client relationships need to be addressed

5. Post-Exit Services: Include when the exiting partner will provide transition services

6. Insurance and Indemnification: Required when specific risks need to be allocated post-exit

7. Brand and Name Usage: Include when the partnership name includes the exiting partner's name

8. Related Party Agreements: Needed when there are additional agreements requiring modification

Suggested Schedules

1. Schedule 1: Partnership Interest Valuation: Detailed calculation of the exiting partner's interest value

2. Schedule 2: Payment Schedule: Detailed timeline and terms for financial settlement

3. Schedule 3: Assets Transfer List: Inventory of assets being transferred or retained

4. Schedule 4: Ongoing Contracts: List of contracts affecting the exit arrangement

5. Schedule 5: Completion Actions: Checklist of actions required to complete the exit

6. Appendix A: Partnership Agreement: Copy of the original partnership agreement

7. Appendix B: Financial Statements: Relevant financial statements used for valuation

8. Appendix C: Regulatory Filings: Required forms and filings for Saudi authorities

Authors

Alex Denne

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

Relevant legal definitions







































Clauses




































Relevant Industries

Professional Services

Retail

Manufacturing

Construction

Real Estate

Technology

Healthcare

Consulting

Trading

Hospitality

Education

Financial Services

Transportation

Energy

Agriculture

Relevant Teams

Legal

Finance

Compliance

Corporate Governance

Risk Management

Operations

Business Development

Executive Leadership

Board of Directors

Partnership Committee

Corporate Affairs

Treasury

Tax

Relevant Roles

Managing Partner

CEO

CFO

Legal Counsel

Corporate Secretary

Business Development Director

Finance Manager

Compliance Officer

Risk Manager

Operations Director

Managing Director

Board Member

Partnership Committee Member

Senior Partner

Executive 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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