A side agreement is a separate contract or agreement used by some or all of the contract’s parties to establish an understanding of matters that the main agreement does not address, clarify, or change the main agreement. A side or beneficiary agreements have equal legal weight to the underlying or primary contract in terms of contract law. In other instances, courts have disagreed with the legitimacy of the beneficiary agreement. These side agreements are often employed in financial or real estate transactions and other business arrangements. They may also be an oral agreement and are usually written down and signed by the parties to the original contract.
The side or beneficiary agreement should be subject to comparable controls as any other contractual arrangement as part of a business organization’s governance plan since they might have a significant financial or operational effect or expose the firm to risks of many different kinds.
When you want to establish a business formation in Dubai and other areas of the UAE, you may rely on our expert legal consultant team’s guidance regarding risk concerns. All companies registered in the UAE, including those in free zones, are subject to the registration requirements with the Beneficial Owner data, except for Public Shareholding companies, businesses owned 100% by local or federal governments, or businesses connected to businesses owned 100% by the UAE.
The beneficiary owner is the one who truly has control over the business, whether it is registered in the UAE or its place of origin. This contract may also be used in connection with private fund agreements; for instance, a specific investor may want to alter the conditions of a limited partnership agreement concerning that investment. To join the venture under conditions that satisfy regulatory requirements, an investor may seek more favorable terms in the contract or need a side letter.
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Beneficiary or Side agreements of various forms
Beneficiary or Side agreements may take many different forms. The most typical commercial contract is a beneficiary one, which is made to ensure that your company and funds continue to be successful after your passing. You may designate beneficiaries in beneficiary commercial contracts, which will be given the profits of your death. It is not a gentleman’s agreement; instead, it is a legitimate, legal contract in every word’s meaning.
Insurance coverage is payable upon death. If you have kids, it could be a good idea to designate them as beneficiaries so they can utilize the funds for their needs or schooling. What kind of insurance do you have in place, and what type of beneficiary agreement you choose will affect how much money is paid to beneficiaries?
Beneficiary or Side agreements may take several distinct forms:
- A testament
The beneficiaries for all estate assets, including cash and real estate, are listed in this form. You should specify and leave out specific individuals from the will if you don’t want particular assets to go to them, like an ex-spouse or another family member.
- Documenting a Living Trust
Due to its flexibility to be amended or revoked before death, a living trust is sometimes referred to as a revocable trust. It also includes two sections, one covering assets acquired during your lifetime and the other covering assets acquired after your death. It would be best if you chose a trustee to oversee the assets while you are still living and then distribute them following your instructions.
How to obtain a business agreement with a beneficiary:
- Establish what kind of beneficiary commercial arrangement your company needs.
- Look for possible partners using the parameters you provide.
- Send a request for information to the partner you’ve selected, detailing the product or service you’re looking for and the price range you’re prepared to pay.
- After getting a response from your prospective partner, wait and haggle until a compromise that serves both parties’ requirements and interests is established.
Required documents for a beneficiary or side agreement:
- A copy of your identification (passport, driver’s license, etc.)
- A copy of the transfer deed, if applicable.
- A duplicate of the property’s profile and layout.
- A duplicate of the purchase agreement, including all appendices and attachments. The vendor should provide this.
- A copy of other written agreements between the parties dealing with the property under discussion. It might comprise contracts for finance, leases, easements, or different understandings about the property’s ownership.
Regarding safeguarding your assets, either individually or collectively, beneficiary or side agreements are incredibly crucial. When establishing a new company, you must consider what would happen if one employee departs or passes away and any other unanticipated circumstances that could need future changes.
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How may Notary Public Dubai assist you?
At Notary Public Dubai, we assist you in side agreement drafting that satisfies your requirements. Side agreement drafting and notarization of side agreement safeguards both your interests and those of your counterparties with the assistance of our experienced attorneys stationed in Dubai. We can also provide guidance on executing such a plan inside your company’s operations to minimize unneeded disruptions.
Hassan Humaid Al Suwaidi is a UAE Citizen and the founder of the firm HHS Lawyers. He has a vast experience of 20 years of dealing with high-value and complex notary requirements. Hassan has been involved in some of the largest legal settlements in the UAE and is commended for his ability to attain the most favourable outcomes for his clients.