Disclosure Letter Template for Denmark

A Disclosure Letter works like a safety net when selling a business in Denmark, letting sellers formally reveal any exceptions or issues related to their warranties. It's the companion document to the main purchase agreement where sellers can be upfront about anything that might not perfectly match their promises.

Under Danish contract law, this detailed document protects sellers from future claims by documenting what buyers knew before closing the deal. It typically includes things like ongoing legal disputes, incomplete contracts, or property issues. Smart sellers use it to share information openly while maintaining legal protection - making it a crucial tool in Danish M&A transactions.

The right time to prepare a Disclosure Letter is when you're selling a business or major assets in Denmark and need to protect yourself from future claims. It becomes essential during the due diligence phase, before signing the final purchase agreement - especially when you've discovered issues that might conflict with your warranties.

Danish companies commonly use Disclosure Letters when dealing with complex transactions involving multiple properties, ongoing contracts, or potential legal challenges. Start drafting it early in the sale process, as soon as you begin making warranties about your business. This gives you time to thoroughly document any exceptions and ensures buyers can't later claim they were unaware of disclosed issues.

• General Corporate Disclosure Letter: The standard version used in most Danish business sales, listing warranties and exceptions about financial statements, contracts, and employee matters
• Real Estate Disclosure Letter: Focuses specifically on property-related disclosures, including tenant agreements, building permits, and environmental issues
• Asset-Specific Disclosure Letter: A narrower version covering only particular assets or divisions being sold, common in partial business transfers
• Industry-Specific Disclosure Letter: Tailored versions for regulated sectors like financial services or healthcare, addressing unique compliance requirements under Danish law

• Sellers: Business owners or company boards who create the Disclosure Letter to protect themselves by revealing exceptions to their warranties
• Corporate Lawyers: Draft and review the document, ensuring it complies with Danish law and effectively shields their clients from future claims
• Buyers: Review disclosures to understand potential risks and issues before completing the purchase, often through their legal teams
• Due Diligence Teams: Work with the disclosed information to verify claims and assess business risks
• Company Directors: Must approve and often sign the final Disclosure Letter, taking responsibility for its accuracy

• Review Warranties: Carefully examine all warranties in the purchase agreement to identify potential exceptions
• Gather Documents: Collect relevant contracts, permits, financial records, and company documentation that support your disclosures
• List Exceptions: Create a detailed inventory of any issues that don't align with your warranties under Danish law
• Structure Information: Organize disclosures to match the warranty sections in your purchase agreement
• Internal Review: Have key department heads verify the accuracy of disclosures in their areas
• Draft Schedule: Use our platform to generate a properly formatted Disclosure Letter that meets Danish legal requirements

• Introduction Section: Define the purpose and scope of disclosures, referencing the main purchase agreement
• General Disclosures: List any information already provided during due diligence or publicly available
• Specific Disclosures: Detail exceptions to warranties, organized to match the purchase agreement structure
• Supporting Documents: Include a schedule of all referenced materials and supporting evidence
• Time Reference: Clearly state when disclosures are effective and any relevant update mechanisms
• Signing Block: Include proper execution sections for all required parties under Danish law
• Governing Law: Specify Danish law as governing the interpretation and enforcement

A Disclosure Letter differs significantly from a Disclosure Agreement in both purpose and timing. While both documents deal with sharing sensitive information, they serve distinct legal functions in Danish business transactions.

• Purpose and Timing: Disclosure Letters are specifically used during business sales to reveal exceptions to warranties, while Disclosure Agreements establish ongoing confidentiality obligations before sharing sensitive information
• Legal Effect: A Disclosure Letter protects sellers from future warranty claims by documenting known issues, whereas a Disclosure Agreement creates mutual obligations to maintain confidentiality
• Duration: Disclosure Letters remain relevant only until the sale completes, but Disclosure Agreements typically continue in force for several years
• Content Focus: Disclosure Letters detail specific facts and circumstances about a business, while Disclosure Agreements outline procedures for handling confidential information