Document background
The Memorandum of Understanding For Share Transfer is a crucial document in Indian corporate transactions that serves as a preliminary agreement between parties intending to execute a share transfer. This document is typically used when parties have reached an in-principle agreement on the transfer of shares but need to document the terms while completing due diligence, obtaining necessary approvals, or fulfilling other conditions precedent. It outlines key aspects such as the number of shares, purchase price, payment terms, and conditions for transfer, while ensuring compliance with Indian corporate laws, securities regulations, and tax requirements. The MOU is particularly important in complex transactions where immediate execution of the final share transfer deed is not feasible due to pending approvals, financing arrangements, or regulatory clearances. While not typically binding in its entirety, certain provisions such as confidentiality, exclusivity, and governing law are usually made explicitly binding.
