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What preliminary agreements are commonly drafted?
The following preliminary agreements are commonly drafted:
- memoranda of understanding;
- joint venture agreements;
- shareholder agreements; and
- non-disclosure agreements.
What documents are required?
Documents required for acquisition by share purchase include an executed share transfer agreement in the form specified by the company and the issuance of a new share certificate by the company. The Myanmar Companies Law 2017 also requires the transaction to be registered in the company share registry, and notice of the transfer filed with the Directorate of Investment and Company Administration.
For acquisition of a company by purchase of assets, required documents include a sale and purchase agreement and ancillary documents, such as assignment agreements for certain rights, assets and existing contracts that are being transferred, and land sale and title transfer documents.
Which side normally prepares the first drafts?
This is at the parties’ discretion.
What are the substantive clauses that comprise an acquisition agreement?
The substantive clauses in an acquisition agreement are:
- a definition or list of what is being sold;
- details of transfer logistics;
- payment details;
- conditions of sale (ie, preconditions and subsequent conditions);
- pre-closing undertakings;
- extensive seller warranties and representations;
- basic purchaser warranties of capacity; and
- confidentiality and non-disclosure clauses.
What provisions are made for deal protection?
Alongside other protections chosen by the parties, the provisions for deal protection may include:
- contractual warranties and representations;
- conditions subsequent to completion of sale;
- remedies specified for breach of contract;
- the right to cure breach;
- provisions to prevent deadlock; and
- buyout rights.
What documents are normally executed at signing and closing?
If acquisition of a company is by transfer of shares, the typical documents at closing are the share transfer agreement and a shareholders’ agreement. A business plan separately developed and agreed by the parties may be attached as a schedule to the shareholders’ agreement.
Are there formalities for the execution of documents by foreign companies?
Stamp duty must be paid and stamps affixed to:
- share transfer agreements;
- land conveyance documents;
- powers of attorney;
- agreements or memoranda of agreement “for or relating to the sale of goods or merchandise”; and
- other documents specified in the Burma Stamp Act.
A foreign party is usually required by the Myanmar party (and vice versa) to produce:
- certified corporate registration documentation;
- a power of attorney authorising the company representative to sign (if not authorised in the registration document); and
- a board of directors resolution, if required by the company’s constitution or articles of association.
Are digital signatures binding and enforceable?
The Electronic Transaction Law 2004 and Evidence Act 1872 (as amended in 2015) recognise digital signatures as valid and enforceable in Myanmar.
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