Document background
The Preliminary Share Purchase Agreement is a crucial document used in the initial stages of corporate acquisitions in Malaysia, serving as a bridge between initial negotiations and the final share purchase agreement. It is typically employed when parties have reached an understanding on key commercial terms but require a formal framework for due diligence and detailed negotiations. The document incorporates essential elements under Malaysian corporate law, including provisions aligned with the Companies Act 2016, Capital Markets and Services Act 2007, and relevant securities regulations. This preliminary agreement becomes particularly important in complex transactions where detailed due diligence is required, or when parties need to secure exclusivity during negotiations. While not all terms are typically binding, certain provisions such as confidentiality, exclusivity, and cost allocation usually create immediate obligations.
