Business Purchase Offer Letter for Philippines

Business Purchase Offer Letter Template for Philippines

A Business Purchase Offer Letter is a formal document used in the Philippines to initiate the process of acquiring a business. This document, governed by Philippine commercial law including the Corporation Code and Civil Code, serves as an initial written proposal outlining the key terms and conditions under which the potential buyer is willing to purchase the business. It includes essential elements such as purchase price, payment terms, assets included, due diligence requirements, and conditions precedent, while adhering to Philippine legal requirements and business practices. The document acts as a preliminary step before proceeding to more detailed negotiations and the eventual preparation of definitive agreements.

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What is a Business Purchase Offer Letter?

The Business Purchase Offer Letter is a crucial initial document in business acquisitions within the Philippine jurisdiction. It is typically used when a potential buyer has identified a target business and wishes to formally express their interest and proposed terms for purchase. The document serves multiple purposes: it demonstrates the buyer's serious intent, outlines the fundamental terms of the proposed transaction, and provides a framework for further negotiations. This letter needs to comply with Philippine commercial laws and business practices, including considerations under the Corporation Code of the Philippines and the Civil Code. While not legally binding in its entirety, certain provisions such as confidentiality and exclusivity periods may be drafted as binding commitments. The document typically precedes more comprehensive agreements and due diligence processes, making it an essential tool in the early stages of business acquisition negotiations.

What sections should be included in a Business Purchase Offer Letter?

1. Letter Date and Address Block: Formal business letter heading including date, recipient's name, title, company name, and complete address

2. Subject Line: Clear indication that this is a Business Purchase Offer

3. Introduction: Formal opening and identification of the offering party and the business being considered for purchase

4. Purchase Price and Terms: Clear statement of the proposed purchase price and basic payment terms

5. Business Assets Included: Overview of what is included in the proposed purchase (assets, inventory, intellectual property, etc.)

6. Due Diligence Period: Proposed timeframe and terms for conducting due diligence

7. Key Conditions: Essential conditions that must be met for the purchase to proceed

8. Offer Validity Period: Clear statement of how long the offer remains valid

9. Next Steps: Proposed process for moving forward if the offer is accepted

10. Closing: Professional closing with contact information and signature block

What sections are optional to include in a Business Purchase Offer Letter?

1. Employee Retention Terms: Include when the offer includes specific terms about retaining current employees

2. Lease Assignment: Include when the business operates from leased premises that need to be transferred

3. Non-Compete Provisions: Include when seeking preliminary agreement on non-compete terms with the seller

4. Inventory Valuation Method: Include when the business has significant inventory that requires specific valuation methods

5. Existing Contracts Treatment: Include when there are significant contracts that need special handling or assignment

6. Training and Transition Period: Include when requiring a specific handover period from the current owner

What schedules should be included in a Business Purchase Offer Letter?

1. Schedule A - Asset List: Preliminary list of major assets included in the proposed purchase

2. Schedule B - Financial Summary: High-level summary of key financial metrics supporting the offer price

3. Schedule C - Key Terms Sheet: Summary of essential terms and conditions in bullet point format

4. Appendix 1 - Proof of Funds: Evidence of financial capability to complete the purchase, if required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Offer Letter

Cost

Free to use

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