Disclosure Letter Template for Nigeria

A Disclosure Letter acts as a crucial safeguard in Nigerian business deals, particularly during mergers and acquisitions. It's a formal document where sellers list all exceptions, potential issues, and important details that might affect the warranties and representations they've made in the main agreement.

Under Nigerian corporate law, this letter helps protect sellers from future claims by allowing them to openly declare anything that could impact the deal's value or terms. Buyers rely on it to understand the true state of the business they're acquiring, while sellers use it to avoid liability for issues they've properly disclosed. The letter becomes a key part of the transaction documents, alongside the main sale agreement.

Use a Disclosure Letter when selling a business or making major corporate transactions in Nigeria. It becomes essential during due diligence, particularly when buyers are examining your company's financial records, contracts, and compliance status. Most Nigerian M&A deals require this document before closing.

The letter proves especially valuable when your business has complex operations, multiple properties, or pending legal matters. For example, if your company holds special licenses, has ongoing tax disputes, or maintains unique supplier arrangements, the Disclosure Letter helps document these details clearly. This timing allows sellers to protect themselves while giving buyers the transparency needed for informed decisions.

• Non Disclosure Agreement Form: Standard type for general business transactions, focusing on basic confidentiality protections
• Business Confidentiality Agreement Form: Enhanced version with specific provisions for corporate transactions and trade secrets
• Confidentiality And Nondisclosure Agreement Form: Comprehensive format combining both confidentiality obligations and disclosure schedules
• Confidentiality Non Disclosure Agreement Form: Specialized version for sensitive industries like technology and healthcare, with detailed disclosure requirements

• Selling Companies: Draft and submit Disclosure Letters to reveal material facts about their business, assets, and liabilities during transactions
• Corporate Lawyers: Review and refine the document's content, ensuring compliance with Nigerian corporate law and protecting client interests
• Buying Companies: Review disclosures to assess risks and make informed investment decisions
• Investment Bankers: Coordinate the disclosure process and advise on transaction implications
• Company Directors: Verify accuracy of disclosures and assume responsibility for the information provided
• Due Diligence Teams: Cross-reference disclosures against company records and market data

• Company Records Review: Gather all corporate documents, contracts, licenses, and regulatory filings from the past 3-5 years
• Legal Compliance Check: List pending litigation, regulatory investigations, and compliance matters affecting the business
• Asset Inventory: Document all properties, intellectual property rights, and material assets with their current status
• Financial Data: Compile financial statements, tax records, and significant business relationships
• Structure Planning: Use our platform's templates to organize disclosures logically by warranty categories
• Internal Verification: Have department heads verify accuracy of disclosures in their areas
• Final Review: Cross-check against the main transaction agreement to ensure all warranties are addressed

• Introduction Statement: Clear reference to the main transaction agreement and purpose of disclosures
• General Qualifications: Scope of warranties being qualified and disclosure standards applied
• Disclosure Schedules: Organized sections matching warranty categories in the main agreement
• Document References: List of all supporting documents and their locations in data room
• Signing Details: Names, titles, and signature blocks for authorized company representatives
• Verification Statement: Confirmation of accuracy and completeness of disclosures
• Governing Law: Clear statement that Nigerian law governs the document
• Appendices: Supporting documents and detailed schedules referenced in main text

A Disclosure Letter differs significantly from a Disclosure Statement in both scope and application within Nigerian business law. While both documents involve sharing information, their purposes and legal implications vary considerably.

• Purpose and Timing: Disclosure Letters specifically accompany major business transactions like mergers or acquisitions, protecting sellers by declaring exceptions to warranties. Disclosure Statements serve broader purposes and can be used independently for general information sharing.
• Legal Protection: A Disclosure Letter offers direct legal protection against warranty breaches when properly drafted, while Disclosure Statements typically provide general transparency without the same contractual shield.
• Content Structure: Disclosure Letters mirror the warranty sections of a main agreement, with detailed schedules and supporting documentation. Disclosure Statements usually follow a simpler, standalone format focused on specific facts or circumstances.
• Binding Effect: Disclosure Letters become integral parts of transaction documents, directly affecting legal rights. Disclosure Statements often serve informational purposes without the same contractual weight.