Document background
The Memorandum of Understanding Share Purchase is a crucial preliminary document used in Indian corporate transactions to establish the framework for share acquisition negotiations. It is typically employed when parties have reached an initial understanding but require a structured document to proceed with detailed due diligence and negotiations. This document, while generally non-binding, captures key commercial terms, valuation principles, exclusivity periods, and the overall transaction structure. It must comply with Indian corporate laws, including the Companies Act 2013, SEBI regulations (for listed companies), and FEMA regulations (for foreign investments). The MOU serves as a roadmap for the transaction, leading to the eventual execution of a definitive share purchase agreement, and includes provisions for confidentiality, due diligence access, and key conditions that must be satisfied before the final transaction.
