Document background
The Shareholder Contract is a fundamental document used when establishing or formalizing relationships between shareholders in companies operating under Saudi Arabian jurisdiction. It becomes essential when two or more parties invest in a company and need to clearly define their rights, obligations, and relationships. The document must comply with both the Saudi Companies Law of 2015 and Sharia principles, making it unique compared to conventional shareholder agreements in other jurisdictions. It typically includes provisions for share ownership, management control, profit distribution, dispute resolution, and exit mechanisms, all structured to meet local regulatory requirements and business practices. This agreement is particularly crucial for companies with multiple shareholders, foreign investors, or those planning significant corporate changes, as it provides a clear framework for corporate governance and shareholder protection within the Saudi legal context.
