Document background
A Term Sheet For Sale of Business is a crucial preliminary document used in Indian business acquisitions and sales to establish the framework for a transaction before proceeding with detailed due diligence and definitive agreements. It captures the parties' initial understanding on key commercial terms such as purchase price, payment structure, assets or shares being transferred, and conditions precedent. While generally non-binding (except for specific provisions), it serves as a roadmap for the transaction and helps identify potential deal-breakers early in the process. The document must consider various Indian legal requirements including corporate law, competition law, tax implications, and sector-specific regulations. It's particularly important in the Indian context where business sales often involve complex regulatory considerations and multiple stakeholder approvals.
