Document background
The MOU for Investment in Business is a crucial preliminary document used in New Zealand business transactions when parties are contemplating significant investment arrangements. It serves as a roadmap for the investment process, typically used after initial discussions but before detailed due diligence and final binding agreements. This document captures the parties' preliminary understanding and intentions regarding the proposed investment, including structure, valuation parameters, and key terms, while maintaining flexibility for detailed negotiations. While generally non-binding, it often includes binding provisions on confidentiality, exclusivity, and costs. The MOU must consider New Zealand's regulatory framework, particularly the Overseas Investment Act for foreign investments, Companies Act, and Financial Markets Conduct Act. It's an essential tool for establishing clear communication and alignment between parties before committing significant resources to the transaction.
