Disclosure Letter Template for India

A Disclosure Letter accompanies major business agreements in India, especially during mergers and acquisitions. It lets sellers list exceptions, qualifications, and important details about their warranties and representations in the main agreement. Think of it as a safety net that protects sellers by openly declaring potential issues upfront.

Companies use Disclosure Letters to share sensitive business information, from ongoing legal disputes to intellectual property matters, helping buyers make informed decisions. Under Indian contract law, these disclosures can shield sellers from future claims, as long as they're truthful and comprehensive. The letter becomes a crucial part of due diligence, particularly in high-stakes transactions regulated by SEBI.

Use a Disclosure Letter when selling a business or entering major commercial deals in India, especially if your company has complex situations to declare. This document becomes essential during mergers, acquisitions, or joint ventures where you need to reveal potential risks or exceptions to your warranties.

Companies particularly benefit from Disclosure Letters when dealing with ongoing litigation, regulatory investigations, incomplete intellectual property registrations, or employment disputes. Creating one early in negotiations helps protect sellers from future claims and builds trust with buyers. For listed companies, SEBI regulations make these disclosures particularly important during takeovers or substantial share transfers.

• Company Disclosure Letter: The standard comprehensive format used in M&A deals, covering all aspects of business operations and warranties
• Conflict Of Interest Disclosure Letter: Specialized version focusing on declaring potential conflicts in business relationships or board positions
• Employee Confidentiality Agreement Form: Tailored for protecting sensitive information when key employees are involved in transactions
• Mutual Non Disclosure Agreement Form: Two-way disclosure format commonly used during preliminary deal negotiations

• Company Directors and Officers: Responsible for approving and signing Disclosure Letters, ensuring all material information is accurately revealed
• Corporate Legal Teams: Draft and review the letters, coordinating with various departments to gather necessary information
• Investment Bankers: Guide the disclosure process during M&A transactions, helping identify critical areas requiring detailed disclosure
• External Legal Counsel: Provide specialized expertise in drafting and reviewing complex disclosures, particularly for regulated industries
• Company Secretaries: Ensure compliance with Companies Act requirements and maintain proper documentation of disclosures
• Potential Buyers/Investors: Review and rely on these letters when making investment decisions or acquiring businesses

• Review Main Agreement: Examine all warranties and representations carefully to identify areas needing disclosure
• Gather Company Records: Collect relevant documents including financial statements, legal disputes, regulatory compliance records, and material contracts
• Department Input: Get detailed information from HR, Finance, Legal, and Operations teams about potential disclosure items
• Organize Disclosures: Structure information to match the warranty sections in the main agreement
• Supporting Documents: Prepare all referenced attachments and organize them as numbered exhibits
• Draft Review: Use our platform's template to ensure comprehensive coverage and proper formatting under Indian law
• Internal Verification: Have department heads verify accuracy of disclosures in their areas

• Identification Details: Full legal names of all parties, transaction reference, and date of the main agreement
• Purpose Statement: Clear explanation linking the letter to specific warranties in the main agreement
• General Disclosures: Broad statements covering publicly available information and regulatory filings
• Specific Disclosures: Detailed exceptions to each warranty, organized by corresponding clause numbers
• Supporting Documents: List of all attached exhibits and their relevance
• Fair Disclosure Statement: Declaration that all disclosures are complete and accurate
• Execution Block: Authorized signatures, company seal, and witness details as required by Indian law
• Governing Law: Clear statement of Indian jurisdiction and applicable state laws

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

• Purpose and Timing: Disclosure Letters are specifically tied to warranties in a main transaction agreement, providing exceptions and qualifications. Disclosure Agreements set ongoing rules for handling confidential information throughout a business relationship.
• Legal Protection: A Disclosure Letter protects sellers from warranty breach claims by documenting known issues upfront. A Disclosure Agreement creates mutual obligations to maintain confidentiality and restricts information use.
• Scope of Information: Disclosure Letters focus on specific facts about a company's condition at a particular time. Disclosure Agreements cover broader categories of confidential information exchanged over time.
• Enforcement Mechanism: Disclosure Letters work as shields against future claims, while Disclosure Agreements provide direct enforcement rights if confidentiality is breached.