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A Disclosure Letter works as a crucial safeguard in Malaysian business deals, especially during mergers and acquisitions. It lets sellers reveal important facts about their company that might affect the transaction's value or terms - from ongoing legal disputes to potential tax issues.

Under Malaysian corporate law, this document protects sellers from future claims by listing exceptions to their warranties. For example, if a company promises "no pending litigation" but has one small lawsuit, they'll include this in the Disclosure Letter to avoid breaching the warranty. It's typically attached to the main sale agreement and gets updated until the deal closes.

You need a Disclosure Letter when selling a business or completing major corporate transactions in Malaysia. This document becomes essential during due diligence, particularly when buyers request detailed information about your company's assets, liabilities, and operations.

Use it to protect your interests before signing sale agreements, share purchase deals, or joint ventures. For example, if your company has an ongoing tax audit or unresolved legal claims, listing these in your Disclosure Letter prevents the buyer from later claiming breach of warranty. Many Malaysian companies prepare this document early in negotiations to maintain transparency and strengthen their bargaining position.

• General Disclosure Letters list all exceptions to warranties in the main sale agreement, covering areas like property, contracts, and employees
• Supplemental Disclosure Letters update previous disclosures with new information discovered during negotiations
• Industry-Specific Letters focus on sector requirements - manufacturing companies might emphasize equipment and safety compliance, while tech firms detail intellectual property matters
• Transaction-Specific Letters adapt to deal types, with different formats for share sales versus asset purchases
• Bundle Disclosure Letters combine multiple subsidiary disclosures for group-wide transactions

• Company Directors: Responsible for approving and signing the Disclosure Letter, ensuring all material information is accurately revealed
• Corporate Lawyers: Draft and review the letter, ensuring it complies with Malaysian law and protects their client's interests
• Potential Buyers: Review disclosures to assess risks and adjust purchase terms or valuations accordingly
• Investment Bankers: Help identify items requiring disclosure during due diligence and transaction structuring
• Company Secretaries: Maintain records and coordinate updates to the letter throughout negotiations

• Review Warranties: Examine the main sale agreement's warranties to identify areas needing disclosure
• Gather Documents: Collect financial statements, contracts, permits, and legal records from the past 3-7 years
• Internal Audit: Interview department heads about potential issues requiring disclosure
• Draft Structure: Our platform helps organize disclosures by warranty category, ensuring nothing is missed
• Supporting Evidence: Compile and index all referenced documents as attachments
• Final Check: Verify all disclosed items match company records and warranty exceptions

• Introduction: Clear identification of parties, transaction details, and date of disclosure
• General Statements: Scope of disclosures and their relationship to warranties in the main agreement
• Warranty References: Specific links between each disclosure and its corresponding warranty
• Disclosure Details: Organized sections matching warranty categories with clear, specific facts
• Bundle Documents: Index of supporting evidence and attached documentation
• Execution Block: Signature sections for authorized representatives, witness details, and company seal
• Governing Law: Express statement that Malaysian law governs the letter

A Disclosure Letter differs significantly from a Disclosure Agreement in both purpose and timing. While both documents deal with sharing sensitive information, they serve distinct legal functions in Malaysian business transactions.

• Purpose and Scope: A Disclosure Letter reveals specific facts about a company during a sale or merger, protecting the seller from warranty breaches. A Disclosure Agreement sets rules for handling confidential information before it's shared.
• Timing of Use: Disclosure Letters come into play during actual transactions, usually near completion. Disclosure Agreements are signed at the start of negotiations or business relationships.
• Legal Effect: Disclosure Letters modify warranty obligations in sale agreements. Disclosure Agreements create new confidentiality obligations between parties.
• Duration: Disclosure Letters have permanent effect on the transaction. Disclosure Agreements typically have specific time limits for confidentiality obligations.