Document background
The Term Sheet For Acquisition of Shares is a crucial preliminary document used in Indian corporate transactions to establish the framework for share purchase negotiations. It is typically employed during the initial stages of a potential acquisition when parties have reached a preliminary understanding but before conducting detailed due diligence or drafting definitive agreements. The document addresses key commercial terms, valuation principles, deal structure, and preliminary conditions while considering Indian regulatory requirements such as Companies Act provisions, SEBI regulations, FDI norms, and competition law thresholds. While most provisions are non-binding, certain sections like confidentiality and exclusivity carry legal force. The document serves as a roadmap for legal counsel to draft detailed transaction documents and helps avoid misunderstandings during later stages of negotiation.
