While the MOA and business license of the company may reflect de jure ownership, ancillary agreements can help the foreign shareholder protect their interests and ensure that they have control of the business. This sale has not been registered with a public authority or with the notary, nor registered in the registers, nor in the register of the company or in the commercial register. The claimants gave a mandate to management without reference to the ancillary agreement for all future transactions. Over the next two years, the company`s business improved and it began to make a profit. The applicants intending to assert their shares in the company`s profits brought an action against the defendant for annulment of the agreement to sell the shares. In a dispute between a UAE investor and a foreign investor, the parties argued over whether an ancillary agreement or the official protocol of the Association (MOA) settled their relationship. The UAE investor insisted that the official MOA be the current document, while the foreign investor argued that the ancillary agreement states that the foreign investor has a higher percentage of shares and that the ancillary agreement is the valid/enforceable agreement to settle the relationship between the two parties. NASs are “ancillary agreements” in which a UAE national agrees to waive all rights to receive dividends, (ii) vote at general meetings, and (iii) receive proceeds from the sale of shares nominally held by LLC. What is a partner`s contract? A shareholders` agreement is a document in which several shareholders of a company participate and describes the results and specific measures taken in the event of the departure of a shareholder from the company, whether voluntarily, involuntarily or if the company terminates trading. Given the legal scenario, foreign investors have resorted to ancillary structures to retain their controlling financial shares in their UAE companies. It is therefore common in the United Arab Emirates for shareholders to execute Nominee Shareholder Agreements (NSA) or Side Agreements between the parties. Under the NSA, a UAE national agrees to waive all rights nominally held by the LLC, rights such as dividends, voting at general meetings, and gaining the proceeds from the sale of shares.
In short, the NSA`s provisions circumvent UAE corporate law. Nsa or tacit agreement prevents the UAE majority shareholder from participating in LLC`s operations, making the foreign partner the sole beneficiary and decision-maker of the company. . . .