Document background
The Stock Purchase Letter of Intent is a crucial preliminary document in Philippine corporate transactions, typically used before entering into a definitive stock purchase agreement. It serves as a roadmap for the proposed acquisition of shares, outlining key commercial terms while maintaining flexibility for detailed negotiations. This document is particularly important in the Philippine context where business relationships and preliminary agreements carry significant weight in commercial dealings. The letter should align with local corporate practices and regulatory requirements, including those under the Revised Corporation Code and Securities Regulation Code. While mostly non-binding, it often includes binding provisions on confidentiality and exclusivity, making it a balanced instrument that protects both parties' interests during the negotiation phase. It's commonly used when parties have reached preliminary understanding on key terms but require a formal framework for proceeding with due diligence and detailed negotiations.
