What is a bringdown letter and why would your company need one?
A bringdown letter is a legal document used in corporate transactions. It is typically requested by the attorney or corporation and it confirms that there have not been any material changes or events that would affect the transaction. It’s important for the following reasons:
- Verification of Information: During the period between signing an initial agreement and the actual closing of a transaction, circumstances can change. A bringdown letter helps the attorney or corporation verify that the representations are true as of the closing date.
- Risk Mitigation: The bringdown letter helps mitigate the risk of unexpected changes that would negatively impact the transaction. It ensures that all parties involved have up-to-date information about the company or individuals financial and operational status.
- Transparency: The bringdown letter promotes transparency between the parties and helps prevent disputes and misunderstandings down the line.
- Legal Protection: The attorney or corporation demonstrates due diligence by taking steps to protect their interest, and the interest of their client. If the bringdown letter provides inaccurate information, there could be potential legal consequences and the corporation would have the option for termination or negotiation.
A bringdown letter plays a crucial role in ensuring that a corporation has the most accurate and current information before completing a transaction. Professional Filing & Search Services, Inc. will provide a bringdown letter on company letterhead and assist your corporation with all of its servicing needs.