Disclosure Letter Template for United States

A Disclosure Letter works as a safety net in Philippine business deals, especially during mergers and acquisitions. It lets sellers formally reveal important facts about their company to buyers, including potential problems, ongoing legal issues, or business risks that might not be obvious from standard documents.

Under Philippine securities laws, this letter protects sellers from future claims by documenting what they told buyers before closing the deal. It covers everything from employee contracts and pending lawsuits to tax matters and regulatory compliance issues. Both parties typically review and negotiate its contents carefully, as it directly affects the final terms and price of the transaction.

Use a Disclosure Letter when selling your business or seeking major investments in the Philippines. This document becomes essential during due diligence, particularly when buyers are scrutinizing your company's assets, liabilities, and operations. It helps protect both parties by clearly documenting what information was shared before finalizing the deal.

Common triggers include preparing for mergers and acquisitions, bringing in new shareholders, or selling significant company assets. The letter proves especially valuable when dealing with complex regulatory requirements, undisclosed contracts, pending litigation, or potential environmental issues that could affect the transaction's value. Timing matters - prepare it early in negotiations to avoid last-minute complications.

• Confidentiality And Nondisclosure Agreement Form: Used alongside Disclosure Letters in business transactions to protect sensitive information shared during due diligence. This agreement ensures confidentiality of disclosed details.
• Employee Confidentiality Agreement Form: Complements Disclosure Letters when employee-related information is being shared during company sales or mergers. It specifically addresses workforce-related disclosures and protects sensitive personnel data.

• Corporate Sellers: Prepare and issue Disclosure Letters to reveal important facts about their business, assets, and potential risks during sale negotiations.
• Potential Buyers: Review and analyze disclosures to make informed decisions about company valuations and deal terms.
• Corporate Lawyers: Draft and review the letters, ensuring legal compliance and adequate protection for their clients.
• Financial Advisors: Help identify which financial matters need disclosure and assess their impact on deal value.
• Company Directors: Review and approve final disclosures, taking responsibility for their accuracy under Philippine corporate laws.

• Company Records: Gather all corporate documents, financial statements, contracts, and regulatory filings from the past 3-5 years.
• Legal Issues: List pending litigation, regulatory investigations, and potential legal risks affecting the business.
• Asset Details: Document ownership status of properties, intellectual property rights, and major equipment.
• Financial Information: Compile tax records, debt obligations, and significant financial commitments.
• Draft Organization: Use our platform's templates to structure disclosures logically, ensuring comprehensive coverage of all material facts under Philippine law.

• Introduction Section: Clear identification of parties, transaction context, and date of disclosure.
• Disclosure Schedule: Organized listing of exceptions to warranties, categorized by relevant agreement sections.
• Material Facts: Comprehensive details about business operations, assets, liabilities, and potential risks.
• General Qualifications: Statements limiting the scope and interpretation of disclosures under Philippine law.
• Signature Block: Authorized signatures, company details, and corporate seals if required.
• Supporting Documents: Referenced attachments, exhibits, and supporting evidence properly indexed.

A Disclosure Letter differs significantly from a Disclosure Statement in both scope and application within Philippine business law. While both documents involve sharing information, they serve distinct purposes and are used in different contexts.

• Purpose and Context: Disclosure Letters are transaction-specific documents used primarily in mergers and acquisitions, while Disclosure Statements are broader documents often required for regulatory compliance or public filing.
• Legal Protection: Disclosure Letters provide specific protection against warranty breaches in a sale agreement, whereas Disclosure Statements fulfill statutory requirements for transparency.
• Content Structure: Disclosure Letters directly reference warranties in a purchase agreement with specific exceptions, while Disclosure Statements present standardized information in a prescribed format.
• Timing and Updates: Disclosure Letters are typically one-time documents for a specific transaction, while Disclosure Statements often require regular updates and ongoing maintenance.