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Joint Venture Agreement Template: Governing Shares, Management, and Exit, Certified by a Licensed Saudi Lawyer
- Category
- Commercial contracts
- Language
- Arabic + English
- Format
- Editable DOCX
CERTIFICATION RECORD
This template was prepared and reviewed by a licensed Saudi lawyer and is kept current as the Kingdom's regulations change.
Where an Arabic and an English text exist, the Arabic text prevails
An agreement governing the venture's purpose, capital, ownership split, management, deadlock, profit distribution, and exit, bilingual.
A joint venture always starts at its best: two parties who complete each other, one holding the market and the other the product, the technology, or the capital. The trouble is that most agreements are written for that moment alone, detailing the shares and forgetting what happens when the partners disagree on a fundamental decision, or when one of them wants to sell their stake to a third party, or when the venture needs additional funding that one side cannot join. Sighaty template C-11 is written for the Saudi context and the provisions of the Companies Law and the Civil Transactions Law, and it covers the venture's purpose and territory, the capital and the ownership split, the form of each contribution, management, reserved matters, the deadlock-breaking mechanism, restrictions on transferring shares, non-compete, periodic reporting, and exit on breach, in two parallel languages with the Arabic text prevailing on any difference.
Get the Joint Venture Agreement TemplateC-11What this agreement is and when you need it
A joint venture agreement is the constitution of a partnership between two businesses cooperating on a defined activity, whether they incorporate a new entity they own in agreed proportions or agree on a joint operation within a known scope. It differs from the articles of association in function: the articles register the entity with the authorities, while this agreement governs how the two partners deal with each other, which is precisely what registration never addresses. The most consequential ground it covers is the unhappy scenarios: a deadlocked vote, additional funding, a partner's exit, and material breach, which are where most partnership disputes originate.
- A partnership between a local business and a foreign partner entering the Saudi market.
- A joint venture between two companies to operate a defined activity or product line.
- A partnership where one side brings the capital and the other brings know-how or assets.
- Formalizing an existing partnership that has been run on understanding without a governing document.
What the smart-fill asks and what you receive
This is one of the most detailed templates in the commercial pack, because every choice in it shifts the balance of the partnership. The smart-fill starts with both parties' details in Arabic and English and a commercial registration number for each, then the venture's purpose and its territory in both languages, the capital, and the ownership split between the parties. It then asks about the form of the contribution: cash, or assets under an attached schedule at agreed values, or know-how, a question usually skipped even though it is the root of any later argument over what each partner actually brought.
Next comes the management section, a genuine fork in the road: is the venture run by a board of managers or by a single general manager? If you choose the board you are asked for the total number of managers and how many each party appoints, and those numbers decide who actually holds control. If you choose the general manager you are asked who appoints them, in Arabic and English. The fill then handles reserved matters that pass only with an enhanced approval, and the deadlock mechanism step by step: if a reserved matter fails twice within a period you set, senior executives meet within a further window, then the matter goes to mediation under the rules of the Saudi Center for Commercial Arbitration, and if that does not succeed within another period it moves to the next step.
The final section covers exit and protection: the lock-up period on transferring shares in years, the profit distribution policy after retaining a portion for reserves and working capital, the frequency of reporting, non-compete during ownership and for a period after it within a territory you define, the cure period for material breach, and what the compliant party may do if the breach goes unremedied, either buying the defaulter's shares at a percentage of fair value or seeking termination and damages. It closes by asking about additional funding, either a shareholder loan on arm's-length terms or a capital increase that dilutes the non-participating party, and about the dispute forum, either arbitration under the Saudi Center for Commercial Arbitration seated in a city you name or the competent commercial court.
Within minutes you receive a formatted bilingual Word document, ready to sign, with unused options stripped out, so you end up with a coherent partnership agreement instead of a draft carrying every alternative in brackets.
Why a lawyer-certified template beats a free download
A joint venture agreement is not a document to be copied. A free form usually states the percentages and the purpose, then leaves the larger void untreated: no mechanism for breaking a deadlock, no restriction on selling a stake to an outsider, no description of what happens when a partner declines to fund a capital call. These are not decorative legal details; they are the questions that will actually be asked in the first difficult year. The Sighaty template is certified by a licensed Saudi lawyer, written to fit the local regulatory framework, and updated as the regulations change, and during fill-in it forces you to make the deferred decisions while you and your partner still agree, which is the cheapest possible time to make them.
Frequently asked questions
What is the difference between a joint venture agreement and the articles of association?
The articles of association are the statutory document by which the company is registered with the competent authorities; their drafting is largely standardized and has no room to detail how two partners deal with each other. The joint venture agreement is your private document, and it is where reserved matters, the deadlock mechanism, transfer restrictions, the distribution policy, and the consequences of breach are written. The two work together rather than replacing one another, and it is the agreement that actually gets read when a dispute arises.
How is a deadlock resolved if each partner refuses the other's position?
The template handles this in stages rather than by a single decision. During fill-in you set how many failed attempts and over what period a matter counts as deadlocked, then a window in which senior executives from both sides meet, then referral to mediation under the rules of the Saudi Center for Commercial Arbitration, then a final period before moving to the next step. The idea is to give the disagreement successive chances to resolve before it reaches an outcome that could end the partnership, because a partnership whose first disagreement goes straight to litigation rarely survives.
What if one partner wants to sell their stake or withdraw?
During fill-in you set the lock-up period on share transfers in years, the period during which neither party may move its shares, so you do not find yourself partnered with someone you never chose a few months after launch. As for exiting because of a material breach left unremedied past the agreed cure period, the template lets you choose the route that suits you, either buying the defaulter's shares at a percentage of fair value or seeking termination and damages.
The content is general guidance, not legal advice; consult a licensed lawyer for your specific case.