Letter of Intent
Selling Your Business: The Letter of Intent
Selling a business is a complicated process with many steps involved. There are items that need to be taken care of long before the parties execute a purchase agreement, including negotiations and a variety of preliminary documents such as the letter of intent.
What is a Letter of Intent (LOI)?
The letter of intent outlines the basic terms of the sale of a business. It is usually prepared after a buyer and seller have had serious discussions about the sale of a business, but before the final contract is created. LOIs are not usually binding, although there could be terms within it that are binding, such as a clause prohibiting the seller from continuing to look for or negotiate with other potential buyers.
Tips for Crafting a Letter of Intent
If you are at the stage where it’s time to consider a letter of intent to sell your business, there are some recommendations you should consider.
Selling a business, you have worked hard to build is a major financial proposition that will have serious implications on your future. If you are at the letter of intent stage of negotiating a sale, it’s time to contact an experienced business lawyer.