Document background
The Non-Compete Clause in Share Purchase Agreement is a critical component of business acquisitions in the Philippines, designed to protect the purchaser's investment by preventing sellers from competing with the business they've sold. This document is typically used when acquiring shares in companies where the sellers possess significant knowledge, relationships, or expertise that could pose a competitive threat if used to compete against the acquired business. The agreement must carefully balance the purchaser's legitimate business interests with Philippine legal requirements, including compliance with the Philippine Competition Act and constitutional protections of the right to trade. The document includes specific provisions on restricted activities, geographic scope, and duration, all structured to ensure enforceability under Philippine law. It's particularly crucial in transactions involving key industry players, specialized knowledge, or significant market share.
