Document background
The Term Sheet for Sale of Business is a crucial preliminary document used in Hong Kong business sale transactions to establish the fundamental terms and understanding between parties before proceeding with detailed due diligence and final agreements. This document is typically prepared when parties have reached initial commercial agreement but before committing significant resources to detailed documentation and due diligence. It outlines key aspects such as purchase price, payment terms, transaction structure, and major conditions, while usually remaining non-binding except for specific provisions like confidentiality and exclusivity. The term sheet serves as a roadmap for legal counsel in preparing the definitive agreements and helps identify potential issues early in the transaction process. In Hong Kong's dynamic business environment, this document must comply with local corporate laws and commercial practices while being sufficiently flexible to accommodate various transaction structures and industry-specific requirements.
