Conditional Intent to Purchase Members Interest

NOTICE OF CONDITIONAL INTENT TO PURCHASE MEMBERS INTEREST

Summary A Conditional Intent to Purchase Members Interest may be considered when a member in a Close Corporation sells portion of his/her member’s interest in the CC to another person, and the purchaser wants to conduct a due diligence before progressing with the sale. The Conditional Intent sets out the material provisions pertaining to the sale, provides for due diligence consents, and lays the foundation for the terms of the Sale of Member’s Interest Agreement.

Why do I need a Notice of Conditional Intent to buy Member’s Interest? A prospective purchaser wanting to buy member’s interest in a Close Corporation, but who first wants to complete a due diligence before the sale of member’s interest is finalised, may consider using a written agreement. A Conditional Intent to buy Member’s Interest sets out the terms of the due diligence to be conducted on the CC before the sale of a member’s interest may be completed, and also provides for the requisite company consents to the due diligence.  

Is this intended for a private company? Then view our Conditional Intention to Purchase Shares.

What does the Notice of Conditional Intention to buy Member’s Interest say? The template terms consist of: Parties; Definitions; Intent to Purchase; Purchase price; Conditional Sale; Due Diligence; Confidentiality; Costs

What does the agreement look like? The standard notice of intent can be printed onto eight pages.

What do you need to do to use the agreement?

• Read the template document to ensure that it suits your requirements. Make changes as required.
• Complete the relevant details, such as the Seller and Purchaser’s names, the name of the Close Corporation and the purchase price. Complete the Annexures, including the credit consents, and attach the draft Sale of Member’s Interest Agreement.
• Ensure the parties sign the agreement and each receive a copy.

Also viewed: Member’s Agreement

Also known as: Letter of intention to buy member’s interest; Due diligence consents

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