Disclosure letter: share purchases

by Practical Law Corporate , based on material supplied by Baker & McKenzie LLP.

Maintained | England, Wales

A standard document that provides a template disclosure letter for use in the sale of the entire issued share capital of a target company incorporated in England and Wales. The document is drafted from the seller's perspective, with the primary purpose of making formal disclosures to the buyer against the warranties contained in the share purchase agreement (SPA). A properly executed disclosure process can protect the seller from a future breach of warranty claim while supplementing the buyer's due diligence by providing a more complete picture of the target's business and liabilities. This document distinguishes between general and specific disclosures, outlining common areas for general disclosure such as accounts, company statutory books, and data room contents. It also provides a framework for making specific disclosures against individual warranties, supported by drafting notes that explore the legal implications for both parties, including key negotiating positions.

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