Kadernani & CompanyA share purchase agreement in the UAE is rarely just a document recording a price and a transfer of ownership.
In a substantial acquisition, the SPA determines how the commercial value and legal risk of buying a UAE business are allocated between buyer and seller. It identifies what is being acquired, how the price will be calculated, what must happen before completion, what the seller is promising about the target and who bears the consequences if those promises prove inaccurate.
For boards, investors, family businesses and international acquirers, the objective should therefore be broader than completing a share transfer.
The agreement should provide a legally workable route from the commercial decision to acquire the business through due diligence, regulatory approval, signing, completion and post-closing integration, while protecting the buyer and seller against risks that have been identified along the way.
The purchase price may dominate negotiations.
In practice, however, provisions dealing with ownership, warranties, indemnities, disclosure, regulatory approvals, liability limitations and completion mechanics frequently determine whether the transaction ultimately delivers the value that the parties expected.
What a Share Purchase Agreement Does in the UAE
A share purchase agreement records the terms on which one or more sellers agree to transfer shares or ownership interests in a company to a buyer.
Unlike an asset acquisition, the legal entity itself normally remains in existence.
The target continues to own its:
contracts;
employees;
receivables;
real estate interests;
intellectual property;
licences;
banking arrangements;
assets; and
liabilities.
The buyer acquires ownership of that existing corporate vehicle.
That distinction is important.
The buyer does not normally acquire only the attractive elements of the business.
Historic liabilities generally remain liabilities of the target company after completion.
They may concern:
tax;
employment;
regulatory compliance;
litigation;
customer claims;
contractual breaches;
environmental matters;
data protection; or
other obligations arising before the buyer acquired the shares.
Although those liabilities remain legally with the target, the buyer becomes economically exposed to them because it now owns the company.
That is why due diligence and contractual protection are central to a share transaction.
The Corporate Jurisdiction Determines the Transfer Route
The UAE does not have one universal share-transfer procedure applying identically to every company.
The process depends on where the target is incorporated and how it is regulated.
A transaction involving a:
mainland UAE limited liability company;
conventional free-zone company;
DIFC company;
ADGM company; or
regulated financial or other specialist business
may require different forms, approvals, registrar procedures and documentation.
The SPA should therefore be designed around the actual transfer process from the beginning.
It is risky to negotiate an international SPA template first and only later ask whether its completion mechanics can be implemented through the target's registrar.
The legal completion structure should reflect the corporate jurisdiction.
Mainland LLC Transfers Require Particular Attention
For a mainland UAE limited liability company, a transfer to an outside purchaser may engage the statutory transfer procedure under the Commercial Companies Law.
Where a partner proposes to transfer an interest to a non-partner, the other partners may have statutory redemption rights.
Under the current framework, the selling partner must notify the other partners through the company's manager of the proposed transferee and the terms of the transaction.
The existing partners then generally have 30 days from the relevant notification to exercise the statutory redemption right.
This issue should be considered before the SPA becomes unconditional.
The legal team should determine whether:
the existing partners are sellers;
any partner is remaining in the company;
a waiver is required;
the constitutional documents modify relevant rights; and
the transfer procedure has been reflected correctly in the conditions precedent and completion timetable.
The transfer documentation must also satisfy the formal requirements applicable to the company and be recorded with the competent authority.
Signing an SPA alone does not necessarily transfer legal title.
The 2025 Companies Law Amendments Matter to SPA Drafting
The UAE corporate framework changed materially through Federal Decree-Law No. 20 of 2025, which amended the Commercial Companies Law.
One important development is the introduction of greater flexibility concerning different classes of interests in limited liability companies.
This means that future acquisitions may involve LLC interests carrying different:
economic rights;
voting rights;
distribution entitlements;
capital preferences;
transfer restrictions; or
other rights permitted under the applicable corporate framework.
A buyer should therefore no longer assume that acquiring a stated percentage of an LLC necessarily gives the same percentage of every economic and governance right.
The legal review should identify:
the class of interests being acquired;
the rights attached to that class;
whether other classes exist;
what voting rights remain with other shareholders; and
whether preferential rights affect distributions, liquidation or future financing.
The SPA should describe precisely what is being sold.
Drag-Along and Tag-Along Rights Can Affect the Transaction
The amended Commercial Companies Law also expressly recognises the ability of LLC partners and private joint stock company shareholders, within the applicable statutory framework, to include provisions supporting drag-along and tag-along-type rights in their constitutional documents.
These rights can materially affect an acquisition.
A seller may possess the contractual ability to compel other shareholders to participate in a sale.
A minority shareholder may have the right to join the transaction on equivalent terms.
The buyer should therefore review:
the memorandum or articles;
shareholders' agreements;
side letters;
options; and
other shareholder arrangements
before determining which sellers need to sign the transaction documents.
A buyer expecting to acquire 100% of a business should not discover shortly before completion that a minority shareholder's rights were never addressed.
Confirm Exactly What the Buyer Is Acquiring
The SPA should identify the target and sale interests with precision.
This includes:
the full legal name of the target;
its registration details;
the seller or sellers;
the number and class of interests being transferred;
the percentage ownership represented;
the rights attaching to those interests; and
whether the interests are fully paid and free from security or other encumbrances.
The review should also identify any:
options;
convertible instruments;
employee equity arrangements;
shareholder loans;
nominee arrangements;
pledges;
pre-emption rights;
usufruct arrangements; or
other rights capable of affecting ownership or control.
A cap table should be verified rather than merely accepted.
Price Mechanics Should Reflect the Economics of the Business
The headline purchase price is only part of the price architecture.
The agreement should determine whether the price is:
fixed;
subject to completion accounts;
based on a locked-box structure; or
subject to another agreed adjustment mechanism.
A locked-box structure can provide greater price certainty where reliable historic accounts exist.
The parties agree an economic reference date and restrict value from leaking from the target to the seller or related parties between that date and completion, except for specifically permitted payments.
A completion-accounts structure may be more suitable where the value of:
cash;
debt;
working capital;
inventory; or
other financial measures
is expected to move materially before closing.
Neither method is inherently superior.
The choice should follow the characteristics of the target and the quality of its financial reporting.
Definitions of Cash and Debt Should Not Be Left to Assumption
Purchase-price disputes frequently arise because commercial parties agree to buy a business on a “cash-free, debt-free” basis without defining what counts as cash or debt.
The SPA should address items such as:
bank debt;
shareholder loans;
accrued interest;
unpaid bonuses;
lease liabilities;
tax liabilities;
transaction expenses;
customer deposits;
overdue payables; and
other debt-like items
where relevant.
The financial definitions should be prepared alongside the accounting and financial advisers.
A mathematically precise adjustment mechanism can still produce a commercial dispute if the underlying definitions are unclear.
Deferred Consideration Requires Credit Protection
Not every transaction is paid entirely at completion.
The parties may agree:
deferred consideration;
earn-outs;
retention;
escrow;
vendor financing; or
payment by instalments.
Each creates a different risk.
If the buyer will owe substantial consideration after completion, the seller should consider the buyer's creditworthiness and whether security is appropriate.
If part of the price is retained to support warranty or indemnity claims, the buyer should ensure that the retention mechanism does not create unnecessary disputes over release.
Earn-outs require particularly careful drafting.
The agreement should explain:
which performance measure applies;
how it is calculated;
which accounting policies apply;
who controls the business during the earn-out period;
what actions the buyer may take; and
how disputes over the calculation are resolved.
An earn-out should not become a second acquisition negotiation after closing.
Due Diligence Should Drive the SPA
The SPA should emerge from due diligence.
It should not be negotiated as a largely fixed template while diligence occurs separately.
A UAE legal due-diligence review may examine:
constitutional documents;
shareholder records;
beneficial ownership;
licences;
regulatory approvals;
material contracts;
financing;
security;
real estate;
employees;
intellectual property;
data protection;
insurance;
litigation;
compliance; and
corporate records.
The objective is not simply to identify problems.
It is to determine what the transaction should do about them.
A diligence issue may result in:
a condition precedent;
a pre-completion remediation obligation;
a price adjustment;
a specific indemnity;
a warranty qualification;
an escrow retention; or
a decision not to proceed.
The SPA should therefore reflect what the buyer actually learned about the target.
Material Contracts Can Determine the Value of the Acquisition
A business may derive much of its value from a small number of contracts.
Those contracts should be reviewed carefully for:
change-of-control provisions;
termination rights;
consent requirements;
exclusivity;
assignment restrictions;
minimum-purchase commitments;
pricing rights;
renewal dates; and
financial covenants.
A share sale normally preserves the identity of the contracting company.
That does not necessarily mean contractual consent is irrelevant.
A customer or lender may have negotiated rights triggered by a change in ownership or control.
Where those contracts are material to the acquisition thesis, consent may need to become a condition precedent.
Regulatory Licences Should Be Tested Against the Post-Closing Structure
A trade licence should not simply be checked for validity.
The buyer should establish whether the licence will remain effective after the proposed ownership and management changes.
Questions may include:
Does the activity require regulatory approval for a change of ownership?
Are there nationality or ownership conditions?
Must a regulator approve the incoming shareholder?
Does a change of control require notification?
Do key managers or directors require regulatory approval?
The answer varies materially by activity.
A conventional trading company presents different issues from a bank, insurance business, virtual-asset provider, healthcare operator, school, telecommunications company or other regulated business.
The regulatory workstream should therefore begin early.
Foreign Ownership Is Broadly Available but Not Unlimited
Foreign investors can now own businesses across a very broad range of UAE economic activities.
That does not mean ownership restrictions have disappeared completely.
Activities classified as having strategic impact remain subject to the requirements of the competent regulator.
Those activities include categories such as:
security and defence;
banking;
exchange businesses;
financing;
insurance;
telecommunications; and
certain other strategic sectors.
The relevant regulator may determine permitted foreign ownership, board participation and other conditions.
The legal analysis should therefore focus on the specific licensed activity of the target, not on an outdated assumption that a UAE shareholder is always required or the opposite assumption that foreign ownership is automatically unrestricted.
Competition Approval Can Become a Closing Condition
Merger-control analysis should be undertaken early in substantial acquisitions.
Under the current UAE Competition Law, an acquisition can constitute an economic concentration where it results in direct or indirect control over another undertaking.
Cabinet Resolution No. 3 of 2025 established the current principal notification thresholds.
A notification may be required where either:
the combined annual UAE sales of the relevant undertakings in the relevant market exceeded AED 300 million during the preceding financial year; or
their combined market share exceeded 40% of transactions in the relevant UAE market during that period.
The analysis is therefore not limited to headline global revenue.
The relevant UAE market must be considered.
Where the applicable threshold is met, the Competition Law requires the relevant application to be submitted generally at least 90 days before completion.
The parties are also subject to the applicable standstill requirement during the review process.
The Ministry's decision period can extend further within the statutory framework.
Competition analysis should therefore occur before the parties announce an aggressive completion timetable.
A merger-control filing discovered shortly before closing can materially disrupt the transaction.
Conditions Precedent Should Deal With Matters That Truly Prevent Closing
A condition precedent is not simply a list of tasks the parties would like completed.
It should normally deal with matters whose absence means the transaction should not close.
Depending on the acquisition, conditions may include:
regulatory approval;
competition clearance;
waiver of shareholder pre-emption rights;
lender consent;
release of share pledges;
key customer consents;
corporate approvals;
specific licensing approvals; or
completion of identified restructuring steps.
The agreement should state:
which party is responsible for satisfying each condition;
the level of effort required;
who controls regulatory submissions;
what cooperation is required; and
what happens if the condition remains unsatisfied at the long-stop date.
The drafting should avoid conditions that one party can manipulate simply to escape a transaction that has become commercially unattractive.
Interim Operating Covenants Protect the Business Between Signing and Closing
Where signing and completion are separated, the seller usually continues to control the target for an interim period.
The buyer has agreed a price based on a particular business.
The SPA should therefore regulate how that business may be operated before closing.
Typical restrictions may address:
material contracts;
borrowing;
capital expenditure;
new employees;
senior-management changes;
dividends;
related-party transactions;
asset sales;
litigation settlements; and
changes to share capital.
The restrictions should be proportionate.
The buyer should be protected against material changes in the business without taking control prematurely or obstructing normal operations.
This balance becomes particularly important where competition-law standstill requirements apply.
Material Adverse Change Clauses Should Be Drafted Carefully
A material adverse change provision may allow a buyer to withdraw where a sufficiently serious adverse development occurs between signing and completion.
It should not be treated as a general option to reconsider the deal.
The provision should define the relevant threshold and determine whether certain events are excluded.
The parties may consider treatment of:
industry-wide developments;
general economic changes;
changes in law;
war or geopolitical events;
loss of major contracts;
regulatory action; or
target-specific deterioration.
The drafting should reflect the commercial allocation of interim risk rather than simply reproducing a precedent from another transaction.
Warranties Allocate Information Risk
Seller warranties provide contractual assurances about the target and the transaction.
Common categories include:
title and authority;
corporate records;
accounts;
tax;
material contracts;
employees;
intellectual property;
litigation;
regulatory compliance;
licences;
data protection;
insurance;
real estate;
financial indebtedness; and
absence of undisclosed liabilities.
Not every acquisition requires the same warranty package.
A technology acquisition may focus heavily on:
software ownership;
source code;
data protection; and
employee-created intellectual property.
A construction company may require greater attention to:
project claims;
performance guarantees;
subcontractors;
retentions; and
outstanding variations.
A regulated business will require additional regulatory warranties.
The warranties should reflect the target.
Fundamental Warranties Should Be Distinguished From Business Warranties
Certain warranties concern the transaction itself.
These may include:
the seller's ownership of the shares;
capacity to enter the SPA;
authority to sell; and
absence of security over the sale interests.
These are often treated differently from operational warranties concerning the target's ordinary business.
The SPA may provide:
higher liability caps;
longer claim periods; or
different disclosure treatment
for fundamental warranties.
That distinction should be made deliberately.
Disclosure Determines What the Buyer Has Accepted
Warranties cannot be analysed separately from disclosure.
The seller normally discloses exceptions to the warranty statements so that the buyer understands identified risks before closing.
The process should be disciplined.
A disclosure should explain the relevant fact sufficiently clearly for the buyer to appreciate its nature and significance.
Simply granting access to thousands of documents in a data room and asserting that everything has therefore been disclosed may create substantial disagreement later.
The SPA should determine:
what constitutes valid disclosure;
whether general disclosure is permitted;
whether the data room is deemed disclosed;
when the data room is frozen; and
how the final disclosure record is preserved.
For important transactions, the closing archive should contain an immutable copy of the data-room contents against which future warranty claims can be assessed.
Indemnities Address Identified Risks
An indemnity is different from a general warranty.
It is usually negotiated where a specific liability has already been identified.
Examples may include:
a pending tax dispute;
litigation;
an unresolved regulatory investigation;
a historic employment liability;
a defective licence;
a known customer claim; or
a specific pre-completion contractual exposure.
The purpose is to allocate that defined risk expressly rather than force the buyer to rely on a broader warranty claim later.
The indemnity should identify:
the triggering event;
the losses covered;
the claims process;
applicable limitations; and
whether the seller controls or participates in third-party defence.
Known risks deserve known treatment.
Liability Limitations Should Be Negotiated as a System
Seller liability is rarely governed by one cap.
The SPA may include:
de minimis thresholds;
basket thresholds;
overall caps;
time limits;
notice requirements;
mitigation obligations;
exclusions for disclosed matters;
restrictions on double recovery; and
different treatment for fundamental warranties, tax and specific indemnities.
These provisions should operate coherently.
A buyer should consider whether the contractual remedy remains meaningful after all limitations are applied.
A seller should ensure that liability does not remain effectively unlimited through several overlapping causes of action.
Fraud and deliberate concealment may also require separate treatment.
Warranty Claims Are Valuable Only if the Seller Can Pay
A buyer can negotiate excellent warranty protection against a seller with no assets and still have little practical recovery.
Seller credit risk should therefore be considered alongside the warranty package.
Depending on the transaction, protection may include:
escrow;
retention;
parent guarantee;
bank security; or
warranty and indemnity insurance
where commercially appropriate.
The cost and complexity should be proportionate to the risk.
The legal team should ask not merely:
“What can we claim?”
but:
“Who will actually pay if the claim succeeds?”
Tax Requires Separate Buyer and Seller Analysis
Tax analysis should not be deferred until the SPA is substantially agreed.
The target's historic tax position affects the buyer because historic liabilities generally remain within the company after a share acquisition.
Due diligence should therefore consider matters such as:
Corporate Tax registration and returns;
VAT;
transfer pricing;
related-party transactions;
customs;
free-zone tax status; and
other relevant tax matters.
The SPA may contain a dedicated tax covenant or tax indemnity allocating responsibility for pre-completion tax liabilities.
The seller's tax position also requires analysis.
A gain arising from a disposal of shares may be exempt from UAE Corporate Tax where the statutory conditions for the Participation Exemption are satisfied.
Where those conditions are not met, a gain may form part of taxable income.
The parties should therefore obtain transaction-specific tax advice rather than assume that a UAE share sale is automatically tax-free.
Free-Zone Tax Status Should Be Included in Due Diligence
Where the target operates in a UAE free zone and claims treatment as a Qualifying Free Zone Person, the buyer should test whether the relevant statutory conditions have actually been satisfied.
That may include reviewing:
the target's income;
qualifying and excluded activities;
mainland transactions;
substance;
transfer pricing;
audited financial statements; and
non-qualifying revenue.
A free-zone licence alone does not establish the tax treatment.
If the acquisition changes the target's activities, group relationships or transaction flows, the buyer should also consider whether the post-completion structure affects future treatment.
Beneficial Ownership Must Be Updated After Closing
A change in share ownership can require changes beyond the shareholder register.
The post-completion process may include updating:
beneficial-owner records;
registrar information;
bank KYC;
tax records;
regulatory notifications;
management appointments; and
powers of attorney.
The legal closing checklist should therefore continue after the share transfer has been registered.
A transaction is not operationally complete if the buyer owns the company but the bank, licence records and beneficial-ownership filings still identify the previous control structure.
Employment Due Diligence Should Look Beyond Standard Contracts
Because the corporate employer normally remains the same in a share acquisition, employment relationships usually continue within the target.
That continuity is one advantage of a share deal.
However, the buyer still acquires exposure to the target's employment history.
Diligence may therefore examine:
employment contracts;
accrued benefits;
leave balances;
commission schemes;
bonus obligations;
end-of-service liabilities;
employee disputes;
restrictive covenants;
immigration records; and
senior-management arrangements.
Change-of-control or transaction bonuses should also be identified.
The acquisition model should not assume that the headline payroll represents the full employment liability.
Management Retention Can Be Critical to Deal Value
Some businesses derive a significant part of their value from the founder or senior management team.
Where those individuals will remain after completion, the SPA may need to coordinate with:
new employment arrangements;
management incentive plans;
consultancy agreements;
retention payments; or
transition services.
The legal documents should make clear whether these arrangements form part of the purchase price or are separate compensation.
That distinction may have tax, employment and accounting consequences.
Intellectual Property Ownership Should Be Verified
A company may use intellectual property without owning it.
This is particularly common in founder-led or family businesses.
A founder may personally own the trademark.
Software may have been created by a consultant without an adequate assignment.
An overseas affiliate may own the brand under an informal licence.
The buyer should therefore verify ownership of:
trademarks;
software;
domain names;
copyright;
designs;
databases;
technology; and
other proprietary rights.
If key intellectual property sits outside the target, the acquisition documents should determine whether it will be assigned, licensed or excluded from the transaction.
The buyer should not discover after completion that the principal asset supporting the business was never owned by the company it acquired.
Data Protection and Cybersecurity Now Form Part of M&A Due Diligence
Many modern UAE businesses hold significant quantities of personal or commercially sensitive data.
The buyer should understand:
what information the target collects;
the applicable legal framework;
where the data is stored;
which processors are used;
whether international transfers occur;
whether security incidents have occurred; and
whether contractual or regulatory notification obligations have been satisfied.
DIFC and ADGM entities may operate under their own data-protection regimes.
A company that appears commercially attractive may carry substantial remediation exposure if its data practices have not developed alongside the business.
Cybersecurity diligence should also assess material incidents, systems dependency and third-party technology arrangements where relevant.
Anti-Money Laundering and Sanctions Exposure Can Affect the Acquisition
For businesses within the relevant regulated or DNFBP categories, AML compliance should be reviewed against the current UAE framework.
The buyer may need to assess:
customer due diligence;
beneficial-owner verification;
risk assessments;
sanctions screening;
suspicious transaction reporting;
record keeping; and
compliance governance.
Cross-border businesses should also consider historic dealings involving sanctioned or higher-risk counterparties.
A serious compliance issue may justify:
a specific indemnity;
remediation before completion;
regulator engagement; or
termination of the proposed transaction.
Litigation and Arbitration Should Be Assessed Commercially
The buyer should identify:
pending litigation;
arbitrations;
regulatory investigations;
threatened claims;
judgments;
awards; and
material settlement arrangements.
The analysis should consider more than the amount pleaded.
A dispute may affect:
a material customer;
a key licence;
intellectual property;
reputation;
cash flow; or
the ability to continue a core activity.
The SPA should allocate known dispute exposure appropriately.
Where the claim is significant, control over post-completion conduct of the litigation may also need to be addressed.
Signing and Completion Should Be Distinguished
In many acquisitions, signing and legal completion do not occur on the same day.
The parties may execute the SPA while awaiting:
regulatory clearance;
competition approval;
lender consent;
shareholder waivers; or
registrar formalities.
The agreement should state clearly when:
the contractual obligations become binding;
economic risk transfers;
legal title transfers; and
the buyer assumes control.
These moments may not be identical.
For a mainland LLC, legal title should be considered against the applicable formal instrument and registration requirements.
The agreement should not create uncertainty by describing the buyer as legal owner before the competent authority has recorded the transfer where registration is necessary for effectiveness against the company and third parties.
Completion Mechanics Should Be Written as an Actual Sequence
The SPA should contain a closing process that somebody can realistically execute.
Depending on the transaction, completion deliverables may include:
share-transfer documentation;
seller and buyer resolutions;
waivers;
amended constitutional documents;
management resignations;
new appointments;
release of security;
banking documents;
payment confirmation;
licensing documentation;
corporate books; and
required registrar filings.
The sequence should reflect dependency.
If payment is being released simultaneously with legal transfer, the parties should determine how those events will be coordinated.
Where registration occurs after signing of the transfer documents, interim protection may be required.
Control of the Business Should Transfer Deliberately
The legal transfer of shares should be coordinated with practical control.
Completion planning should address:
bank mandates;
online banking credentials;
company seals where relevant;
accounting systems;
corporate records;
email access;
key contracts;
employee communications;
regulatory portals; and
physical premises.
A buyer should not acquire the shares while remaining unable to operate the company.
Equally, the seller should not surrender control before the agreed purchase consideration has been secured.
Restrictive Covenants Should Protect Legitimate Transaction Value
Where the seller remains capable of competing immediately after disposing of the business, the buyer may seek:
non-compete;
non-solicitation; and
non-dealing protections.
These restrictions should be tailored to the legitimate commercial interest being acquired.
Their:
duration;
geographical scope;
restricted activities; and
protected customers or employees
should be proportionate to the transaction.
Overly broad restraints can create enforceability problems.
The objective should be to protect the goodwill and commercial value purchased, not unnecessarily prevent legitimate future activity.
Transition Services Can Be More Important Than the SPA Suggests
A business may depend operationally on the seller or another group company for:
IT;
finance;
HR;
premises;
procurement;
licensing;
customer support; or
shared systems.
If those services stop abruptly at completion, the acquired company may not be operationally independent.
A transition services agreement may therefore be needed.
It should state:
which services continue;
for how long;
at what cost;
to what service standard; and
how transition to independent systems will occur.
Separation planning should begin during diligence rather than after closing.
Governing Law Should Fit the Transaction
The governing law of the SPA should be chosen deliberately.
Depending on the transaction, parties may consider:
UAE law;
DIFC law;
ADGM law; or
another law where legally appropriate.
The contractual governing law should also be distinguished from the mandatory corporate law governing transfer of the shares.
Selecting a foreign or financial-free-zone law for contractual rights does not eliminate local corporate requirements concerning legal ownership, regulatory approval or registration of interests in a mainland company.
The documents should work together.
Dispute Resolution Should Follow the Enforcement Strategy
SPA disputes can involve substantial claims concerning:
warranties;
indemnities;
price adjustments;
earn-outs;
fraud;
completion obligations; or
breach of restrictive covenants.
The appropriate dispute forum should be selected before signing.
Possible routes may include:
UAE onshore courts;
DIFC Courts;
ADGM Courts; or
arbitration under DIAC, ICC or SIAC rules.
Arbitration can be attractive for cross-border M&A disputes where confidentiality, specialist tribunals and international enforcement are important.
Court litigation may be more appropriate in other circumstances.
The analysis should consider:
the governing law;
identity of the parties;
asset location;
likely remedies;
need for urgent relief; and
where any judgment or award will eventually be enforced.
The strongest clause is the one designed around the deal rather than copied from another transaction.
Expert Determination May Suit Certain Price Disputes
Not every disagreement under an SPA needs to become full litigation or arbitration.
Completion-account adjustments, earn-out calculations and other accounting disputes may be suitable for expert determination by an independent accountant.
The agreement should define:
which questions the expert may decide;
the applicable accounting principles;
the information available to the expert;
the timetable; and
whether the decision is final except in specified circumstances.
The expert's role should be limited to matters genuinely within its expertise.
Legal disputes concerning interpretation, fraud or contractual liability generally require a different mechanism.
Post-Closing Obligations Should Not Be Forgotten
Completion does not necessarily end the transaction.
The SPA may require continuing obligations concerning:
tax cooperation;
records access;
regulatory filings;
release of guarantees;
transition services;
earn-outs;
deferred consideration;
insurance claims; and
conduct of historic litigation.
These obligations should have clear ownership within the buyer's and seller's organisations.
A transaction can remain legally incomplete in practice if nobody is responsible for the post-closing work.
A Practical UAE SPA Review
Before signing a material UAE share purchase agreement, decision-makers should be able to answer:
Exactly which shares or interests are being purchased?
What rights attach to them?
Are any other classes, options or competing rights outstanding?
Does any partner have statutory or contractual pre-emption or redemption rights?
What regulatory approvals are required?
Does UAE merger-control notification apply?
Does the buyer satisfy any applicable ownership restrictions?
Have key contracts been reviewed for change of control?
Are target licences secure following the ownership change?
What did due diligence identify?
How has each material risk been addressed in the SPA?
Are the price definitions clear?
What warranties and indemnities apply?
Has disclosure been properly documented?
Can the seller satisfy a substantial claim?
When does legal title actually pass?
What must happen at completion?
How will operational control transfer?
Where will disputes be resolved?
If several of these questions remain unanswered at signing, the parties may be committing to a transaction before its legal structure is complete.
The SPA Should Function as the Transaction's Risk Map
A sophisticated share purchase agreement does not need complexity for its own sake.
Its purpose is to state clearly:
what the buyer is acquiring;
what the buyer is paying;
what must happen before ownership changes;
what the seller is promising;
what risks have been disclosed;
who bears identified liabilities; and
what happens if something goes wrong.
The best SPA is therefore not simply the longest or most buyer-friendly or seller-friendly agreement.
It is the agreement that reflects the actual business being acquired and provides a practical route to completion.
For boards and investors, the real test is straightforward:
after reviewing the SPA and due-diligence record, decision-makers should understand exactly what value they are acquiring, what liabilities remain within the target, which risks have been allocated to the seller and which risks the buyer has consciously accepted.
How Kadernani & Company Legal Consultants Can Assist
Kadernani & Company Legal Consultants provides strategic, commercially focused legal advice to buyers, sellers, investors, family businesses, founders and international groups undertaking acquisitions, disposals and corporate transactions throughout Dubai, Abu Dhabi, the wider UAE and cross-border markets.
For professional advice regarding share purchase agreements in the UAE, M&A transactions, legal due diligence, share transfers, warranty and indemnity protection, corporate restructuring, joint ventures, shareholder arrangements, DIFC and ADGM transactions or cross-border acquisitions, contact Kadernani & Company Legal Consultants to discuss the transaction structure appropriate to your commercial objectives.
Our approach begins with understanding the business being bought or sold rather than immediately adapting a standard SPA.
The legal review should first identify the target's corporate structure, ownership rights, licences, material contracts, financing, employees, intellectual property, tax position, regulatory exposure and existing disputes.
That diligence should then drive the transaction documents.
A material risk identified during diligence should have a clear commercial treatment, whether through remediation, a condition precedent, price adjustment, warranty, specific indemnity, retention or another agreed protection.
For mainland LLC acquisitions, particular attention should be given to the statutory and constitutional transfer framework, including any pre-emption or redemption rights, transfer formalities and registrar requirements. The SPA completion provisions should correspond with the legal process through which ownership actually changes.
The 2025 amendments to the Commercial Companies Law also make it increasingly important to understand the rights attaching to the particular interests being acquired. Where an LLC has several classes of interests, the buyer should assess voting rights, economic preferences, distribution rights, transfer restrictions and other class protections rather than rely solely on the percentage shown on the cap table.
For larger acquisitions, competition analysis should begin early. Under the current UAE merger-control framework, the transaction may require notification where the relevant AED 300 million UAE sales threshold or 40% market-share threshold is satisfied. Where filing is required, regulatory timing and standstill obligations should be built into the conditions precedent and long-stop date rather than addressed immediately before closing.
Regulated and strategic-impact businesses require additional care. The buyer should establish whether changes in ownership, control, directors or management require approval from the relevant regulator before completion.
Purchase-price mechanics should also be developed alongside the financial analysis. Whether the transaction uses a locked box, completion accounts, deferred consideration, earn-out or retention, the definitions and dispute mechanism should be sufficiently clear to prevent price uncertainty from continuing after the shares have changed hands.
Seller liability should be considered commercially rather than only through drafting. A warranty is valuable only if a claim can ultimately be recovered. Where significant post-completion exposure remains, appropriate escrow, retention, guarantee or other credit protection may need to form part of the transaction structure.
For sellers, disciplined disclosure is equally important. The disclosure exercise should identify material exceptions clearly enough for the buyer to understand them and create a reliable record of the information available before completion.
The transaction should also be designed around implementation. Signing, regulatory approval, legal completion, payment and transfer of operational control are not necessarily the same event. The SPA and closing checklist should establish exactly when and how each occurs.
Following completion, ownership records, beneficial ownership, licensing information, bank mandates, management appointments and regulatory records should be updated so that the legal structure and operational reality remain aligned.
A share purchase agreement cannot eliminate every risk within an acquired business.
It can ensure that those risks are investigated, understood and allocated before the buyer becomes the owner.
For boards and senior decision-makers, the practical test is straightforward: the SPA should give the parties a clear route from agreed commercial terms to legally effective ownership, while making transparent which historic and future risks each side has agreed to bear.
Where that clarity is missing, a senior-led transaction review before signing is usually the more prudent course.