A Guide to Drafting an Agreement for Selling Shares and Termination of a Company

Selling shares and terminating a company are significant events that require careful consideration and appropriate documentation. When shareholders decide to sell their shares and dissolve a company, drafting a comprehensive agreement becomes essential to ensure a smooth and legally sound process. Selling shares and terminating a company in the United Arab Emirates (UAE) requires careful planning and adherence to legal regulations.

These processes involve multiple parties and intricate details that must be addressed appropriately in a comprehensive agreement. This guide provides an overview of the critical considerations and essential elements to be included when drafting an agreement for selling shares and termination of a company in the UAE.

Important points you should know about – Sale And Purchase Agreements (SPAs) For Company Shares

What is An Agreement for Selling Shares and Termination of a Company?

An Agreement for Selling Shares and Termination of a Company is a legally binding document that outlines the terms and conditions of the sale of shares in a company and the subsequent termination of the company’s operations. It is a comprehensive agreement that governs the process of transferring ownership of shares from the selling shareholders to the buyer(s) and ensures a smooth and orderly dissolution of the company.

This agreement typically includes provisions related to the following:

  1. Clear Identification of Parties

The agreement should begin by clearly identifying the parties involved. It includes the names, addresses, and any relevant details of the shareholders and the company being terminated. Providing accurate and up-to-date information is crucial to avoid confusion or disputes later on.

  1. Share Sale Terms

The agreement should outline the terms of the share sale, including the number of shares being sold, the purchase price, and any conditions or contingencies associated with the sale. Specifying whether the sale is for all the shares or a portion of them is essential. Additionally, the agreement should address any warranties or representations made by the selling shareholders regarding the shares being sold.

  1. Termination of the Company

The agreement should clearly state the intention to terminate the company following the share sale. This section should outline the steps and procedures to be followed for the dissolution of the company, including the necessary filings with relevant government authorities and any specific legal requirements that must be fulfilled.

  1. Allocation of Assets and Liabilities

When terminating a company, addressing the allocation of assets and liabilities among the shareholders is crucial. The agreement should specify how the company’s assets and liabilities will be distributed and settled, ensuring fairness and transparency. It may be necessary to involve legal and financial professionals to determine the appropriate allocation and address potential tax or legal implications.

  1. Release and Indemnification

To protect the parties involved, the agreement should include provisions for release and indemnification. It ensures that the selling shareholders release the company and its future owners from any claims, liabilities, or obligations arising from the sale of shares and the termination of the company. This section helps safeguard all parties from future legal disputes or financial obligations.

  1. Confidentiality and Non-Disclosure

It is essential to include confidentiality and non-disclosure provisions in the agreement to protect sensitive information. It ensures that both parties agree to maintain the confidentiality of any proprietary or confidential information shared while selling shares and terminating the company.

  1. Governing Law and Dispute Resolution

Including a governing law clause is crucial, as it determines which jurisdiction’s laws will govern the agreement. Specifying a dispute resolution mechanism, such as arbitration or mediation, can help resolve any disagreements arising during or after the termination process.

  1. Effective Date and Execution

It states the effective date of the agreement, marking the commencement of the share sale process and the termination of the company. It also outlines the execution process, including the method of signing and the parties’ responsibilities for executing the agreement.

Read more about – Power Of Attorney For Company Shares


Drafting an agreement for selling shares and terminating a company requires careful attention to detail and consideration of various legal and financial aspects. By including the essential elements discussed in this article, parties can ensure a smooth and legally compliant process. It is always advisable to seek professional legal counsel to review and finalize the agreement to mitigate any potential risks and provide a successful conclusion to the sale of shares and termination of the company.

You may want to know: Essential Clauses Of Share Purchase And Assignment Agreements In UAE

Drafting lawyer at Notary Public Dubai

Drafting an agreement for selling shares and termination of a company in the UAE requires careful attention to detail and compliance with legal requirements. By following the guidelines outlined in this guide, you can ensure that the agreement covers all essential aspects and protects the interests of all parties involved. A drafting lawyer at Notary Public Dubai offers precise and tailored legal document drafting services. With a thorough understanding of UAE laws and regulations, our experienced drafting lawyers at Notary Public Dubai ensure that your contracts, agreements, and other documents meet the specific requirements of the UAE. Trust our drafting lawyer to deliver accurate and legally compliant documents for your business needs.

Contact our drafting lawyer at Notary Public Dubai for more information.