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A Disclosure Letter accompanies sale and purchase agreements to detail important facts, risks, or exceptions about the business being sold. It protects sellers by documenting everything they've revealed to buyers about potential issues, limitations, or problems with the assets or company.

Under NZ law, this letter forms a crucial part of the due diligence process, letting sellers qualify their warranties and avoid future claims. Buyers rely on these disclosures to make informed decisions and understand exactly what they're purchasing. The letter typically includes specific schedules, supporting documents, and key information about contracts, employees, property, and any ongoing disputes.

Use a Disclosure Letter when selling your business or company assets in New Zealand to protect yourself from future legal claims. This document becomes essential during merger and acquisition deals, management buyouts, or any significant business sale where you need to reveal potential issues to buyers.

It's particularly important when dealing with complex assets, multiple properties, large employee teams, or ongoing legal matters. Getting your Disclosure Letter right early in negotiations helps avoid disputes later and gives buyers clarity about what they're purchasing. Many sellers prepare it alongside their lawyers as soon as they begin serious sales discussions.

• Non Disclosure Letter: For standard business sales and straightforward asset transfers
• Comprehensive Disclosure Letter: Used for complex corporate sales with detailed warranties and extensive business operations
• Supplemental Disclosure Letter: Adds new information or updates previous disclosures during extended negotiations
• Industry-Specific Letters: Tailored for sectors like technology, property, or manufacturing with unique disclosure requirements
• General Disclosure Bundle: Combines the main Disclosure Letter with supporting schedules and documentary evidence

• Business Sellers: Create and sign the Disclosure Letter to reveal important facts about their company and limit future legal liability
• Corporate Buyers: Review disclosures to understand risks and issues before completing the purchase
• Commercial Lawyers: Draft and review the letter, ensuring it properly protects their client's interests and meets legal requirements
• Due Diligence Teams: Use the letter to verify information and assess business risks during the sale process
• Company Directors: Review and approve final disclosures, often signing off on the letter's contents

• Gather Documents: Collect all business records, contracts, property documents, and financial statements
• Review Warranties: Check the sale agreement's warranty clauses to identify what needs disclosure
• List Issues: Document any ongoing disputes, regulatory matters, or potential problems affecting the business
• Verify Details: Confirm accuracy of employee information, intellectual property rights, and business permits
• Use Our Platform: Generate a legally-sound Disclosure Letter template that ensures all key elements are included
• Final Check: Review all disclosures for completeness and accuracy before sharing with the buyer

• Opening Statement: Clear identification of the parties and reference to the main sale agreement
• Purpose Declaration: Statement explaining this letter qualifies the warranties in the sale agreement
• General Disclosures: Broad statements covering publicly available information and records
• Specific Disclosures: Detailed responses to each warranty, organized by category or clause number
• Supporting Documents: List of all attached evidence and supporting materials
• Execution Block: Dated signatures from authorized representatives, with appropriate witness provisions
• Disclosure Schedules: Organized appendices containing detailed business information and documents

A Disclosure Letter differs significantly from a Disclosure Statement, though both deal with revealing important information. Here's how they compare:

• Purpose and Context: Disclosure Letters specifically accompany business sales to qualify warranties, while Disclosure Statements are broader documents used in various contexts like financial services or property transactions
• Legal Effect: A Disclosure Letter actively modifies warranty obligations in a sale agreement, whereas a Disclosure Statement typically fulfills statutory requirements without changing other contractual terms
• Timing and Updates: Disclosure Letters often evolve during negotiations and can be updated until completion, but Disclosure Statements are usually one-off documents provided at a specific point
• Structure and Content: Disclosure Letters organize information by warranty references and include supporting evidence, while Disclosure Statements follow prescribed formats based on regulatory requirements