Disclosure Letter UK: Company Sale Guide (2026)

What this document is

A disclosure letter is a formal written statement from the seller of a company (or its shares) to the buyer, identifying matters that would otherwise make the warranties in the sale agreement inaccurate. In a typical share sale, the seller gives the buyer a long list of warranties covering areas like accounts, contracts, litigation, tax, employees, intellectual property and property.

The disclosure letter is where the seller flags anything that does not fit those statements perfectly. The letter usually comes with a disclosure bundle, which is a collection of supporting documents the seller is pointing the buyer towards. Once a fact is properly disclosed, the buyer generally cannot later sue for breach of that warranty in relation to the disclosed matter.

That is why the drafting, and the negotiation around it, matters so much. It is prepared late in the deal timetable, often finalised in the days before completion, and signed at the same time as the sale agreement itself.

How to use this document

1. Review the warranties carefully. Before drafting begins, the seller and their solicitors should go through every warranty in the draft sale agreement line by line. This is the only way to identify what actually needs disclosing. Each warranty is effectively a promise, and the exercise is about spotting where reality does not quite match the promise. 2. Gather supporting documents into a bundle. The disclosure bundle contains the records that back up the specific disclosures, things like key contracts, litigation correspondence, employment issues, tax papers and property documents. The bundle needs to be indexed clearly so the buyer can find each item referenced in the letter without hunting through hundreds of pages. 3. Draft general and specific disclosures. General disclosures cover publicly available information such as Companies House filings, Land Registry entries and items turned up by the buyer's searches. Specific disclosures address particular issues affecting named warranties. The two categories work together, and the wording of each disclosure needs to be precise enough to qualify the warranty but not so vague that the buyer rejects it. 4. Negotiate the scope with the buyer. The buyer's solicitors will almost always challenge disclosures they consider too broad, too vague, or not fairly disclosed. Expect back-and-forth over what counts as a proper disclosure, whether documents in the data room are automatically disclosed, and how much detail the seller must give. This stage often runs right up to signing. 5. Finalise and sign at completion. The letter is dated and signed at the same time as the sale agreement. The buyer acknowledges receipt, and from that point the disclosed matters are treated as known. Keep a full copy of the signed letter and bundle, as it may need to be revisited if a warranty claim arises later.

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