Document background
The Preliminary Share Purchase Agreement is a crucial document used in the initial stages of corporate acquisitions in the Philippines. It serves as a bridge between initial negotiations and the final share purchase agreement, providing a structured framework for due diligence and detailed negotiations. This document is particularly important in the Philippine context, where corporate transactions must navigate specific regulatory requirements under the Corporation Code, Securities Regulation Code, and potentially the Foreign Investments Act. It typically includes both binding provisions (such as confidentiality and exclusivity) and non-binding elements (like the preliminary purchase price and structure), allowing parties to progress towards a final agreement while maintaining necessary legal protections. The agreement is commonly used when parties have reached preliminary understanding on key terms but require a formal structure for further investigation and negotiation of the target company.
