For two or more founders
Co-founders papering a shareholders' agreement
The short answer
Two or more founders paper their relationship with a shareholders' agreement, the private contract that says what the memorandum the authority filed does not: what happens when one leaves, wants to sell, stops working or disagrees. It is legal advice and drafted by a licensed law firm from our network under its own engagement; we brief the firm from your corporate file, reconcile the agreement with the memorandum, and carry out the corporate steps it calls for.
The memorandum of association is the company's public constitution: who holds what, how decisions are taken, how shares transfer. It is drafted to the authority's template and it is silent on most of what founders actually fall out over — vesting, a founder who stops contributing, a sale one wants and another does not, a deadlock, a new investor. A shareholders' agreement is the private contract that fills that silence, and the earlier it is signed the cheaper the conversation is.
Because the agreement sits beside a public document, the two must agree: reserved matters in the agreement need the memorandum's decision thresholds to allow them, transfer restrictions need the authority's transfer process to enforce them, and some provisions are only effective if the memorandum is amended to carry them. That reconciliation is corporate work, and it is what we do around the law firm's drafting.
At a glance
- Indicative cost
- The law firm quotes its own fee under its own engagement, usually fixed for a defined document; the VelaroZone service fee for the brief and the corporate steps is itemised in your engagement letter.
- Timing
- The brief in days; drafting and negotiation take the time the founders take; the filings follow signature.
- What's included
- A written brief from your corporate file
- Introduction to a licensed law firm from our network
- Memorandum amendments, resolutions and filings after signature
This is for you if
- Two or more founders hold shares, or will, and nothing but the memorandum governs the relationship.
- One founder is putting in money and another time, and you want that recognised.
- An investor is coming in and wants an agreement before they sign.
- You would rather decide the hard questions now than in a dispute.
This may not be the right route if
- You want legal advice from Velarozone; we are not a law firm and the agreement is the law firm's work.
- You want a template signed without anyone reading it against the memorandum.
- There is already a dispute; that is a matter for a lawyer first, and we introduce one.
At a glance
- Indicative cost
- The law firm quotes its own fee under its own engagement, usually fixed for a defined document; the VelaroZone service fee for the brief and the corporate steps is itemised in your engagement letter.
- Timing
- The brief in days; drafting and negotiation take the time the founders take; the filings follow signature.
- What's included
- A written brief from your corporate file
- Introduction to a licensed law firm from our network
- Memorandum amendments, resolutions and filings after signature
What this service includes
- A written brief for the law firm from your corporate file: shareholders, capital, memorandum, what each founder contributes.
- Introduction to a licensed law firm from our network whose practice fits the matter.
- The agreement read against the memorandum, and the amendments the agreement needs identified.
- The corporate steps carried out: memorandum amendments, register entries, resolutions, authority filings.
- One point of contact across the legal and corporate work.
What it does not include
- Legal advice from Velarozone, in any form.
- The law firm's fees, which it quotes and bills under its own engagement letter.
- Any promise about how a future dispute would be resolved.
Process
How the work is sequenced
Each stage has its own dependencies — activity approvals, document legalisation, authority processing, and bank review — and we report progress against them rather than against one overall date.
- 01
Brief
The founders' positions, contributions and concerns written into a brief from the corporate file.
- 02
Engage
The law firm introduced; it issues its own engagement letter and agrees its fees with you.
- 03
Draft and negotiate
The firm drafts and the founders negotiate; we supply the corporate facts as needed.
Giving staff equity as well? Options and phantom shares are their own instrument, and their own guide.
Prefer to start in writing? Send the details through the contact form.
Start with a structure assessment
In an initial consultation you receive a plain-language decision summary, a document-preparation list, and the next actions for your situation. Current figures are confirmed within your adviser-reviewed route comparison.
Memorandum or agreement
What each document does
The questions founders ask, and which document answers each.
The memorandum of association against a shareholders' agreement, by question.
Who owns what
- Memorandum of association
- Yes, on the public register
- Shareholders' agreement
- Repeats it, and says what changes it
A founder stops working
- Memorandum of association
- Silent
- Shareholders' agreement
- Vesting, good and bad leaver, what happens to the shares
Selling the company
- Memorandum of association
- Transfer mechanics only
- Shareholders' agreement
- Drag-along, tag-along, who can block a sale
Deadlock
- Memorandum of association
- Decision thresholds only
- Shareholders' agreement
- How a deadlock is broken
A new investor
- Memorandum of association
- Share capital and transfer process
- Shareholders' agreement
- Pre-emption, anti-dilution, board seats
Confidentiality and non-compete
- Memorandum of association
- Silent
- Shareholders' agreement
- Yes, where the law allows
Who enforces it
- Memorandum of association
- The authority's register and process
- Shareholders' agreement
- The parties, in the forum the agreement chooses
| Question | Memorandum of association | Shareholders' agreement |
|---|---|---|
| Who owns what | Yes, on the public register | Repeats it, and says what changes it |
| A founder stops working | Silent | Vesting, good and bad leaver, what happens to the shares |
| Selling the company | Transfer mechanics only | Drag-along, tag-along, who can block a sale |
| Deadlock | Decision thresholds only | How a deadlock is broken |
| A new investor | Share capital and transfer process | Pre-emption, anti-dilution, board seats |
| Confidentiality and non-compete | Silent | Yes, where the law allows |
| Who enforces it | The authority's register and process | The parties, in the forum the agreement chooses |
The service
Legal services
The service page sets out what is a corporate task and what is a legal matter, who advises and who bills.
See the legal service
Every route is planned against how the business will actually operate in the UAE.
After the licence
What you may also need
The four services most founders in this situation ask about next, each on its own page.
Visas & PRO services
Residence visas for owners, staff and family, Emirates ID and medicals, and the PRO work that keeps a licence and its people in good standing. Eligibility and approval stay with the authority.
→UAE bank account setup
A bank-ready file and an introduction to the bank whose appetite matches your profile. Approval and timing stay with the bank.
→Accounting & bookkeeping
Monthly bookkeeping, VAT and corporate-tax filings, and year-end accounts, with statutory audit referred to a registered auditor.
→Legal services
Contracts, corporate documents, disputes and regulatory matters, advised by licensed law firms from our network.
→
Questions
Frequently asked
- Can we just amend the memorandum instead?
- Some provisions can go into the memorandum, and some must; others do not belong on a public register or are not accepted by the authority's template. The law firm advises which is which, and we file the amendments the advice calls for.
- When should we sign it?
- Before there is anything to argue about — ideally at formation, and in any case before an investor, a key hire with equity or a sale changes the picture. An agreement signed in a dispute is a settlement, not an agreement.
- Does a free-zone company need one?
- The need comes from having more than one shareholder, not from the jurisdiction. Free-zone authorities have their own templates and transfer processes, which is exactly why the agreement has to be reconciled with them.
- What does it cost?
- The law firm quotes its own fee under its own engagement, usually fixed for a defined document; our coordination is the VelaroZone service fee, itemised in your engagement letter. You will see two invoices for two different things.
- One founder is abroad. Can they sign remotely?
- The agreement itself, usually yes, as the law firm advises. The memorandum amendments and authority filings have their own signature and attestation rules, which we sequence around where each founder is.
Sources
Regulations, fees, and eligibility can change. Every regulatory statement is re-checked before publication and dated above.
Legal notes and scope
Velarozone provides setup and operational-readiness coordination. This page is general information, not legal, tax, immigration, or banking advice.
This page is general information about UAE business setup, not legal, tax, immigration, or banking advice. Rules, fees, permitted activities, and bank policies can change. Final eligibility depends on your facts and the applicable rules at the time of application.
Velarozone is not a law firm, is not licensed to practise law in the UAE and does not give legal advice. A shareholders' agreement is drafted and advised by a licensed law firm under its own engagement letter, and the firm alone is responsible for it.