Document background
The Preliminary Share Purchase Agreement is a crucial document in the early stages of M&A transactions in Hong Kong. It serves as a bridge between initial negotiations and the final definitive agreement, typically used when parties have reached broad commercial understanding but require further due diligence and detailed negotiation. The document outlines key transaction terms, timelines, and conditions while clearly distinguishing between binding and non-binding provisions. It must comply with Hong Kong corporate laws, securities regulations, and stamp duty requirements. This agreement is particularly important in the Hong Kong market where preliminary agreements are commonly used to demonstrate transaction commitment while maintaining flexibility for detailed terms. It provides a structured framework for the due diligence process and subsequent negotiations, while protecting both parties' interests through confidentiality and exclusivity provisions.
