Letter of Intent to Buy a Business
LOI Drafting and negotiation Lawyer
When buying a business, you want to make sure that you do things well from the beginning. Having an M&A lawyer by your side since the early stages of the business acquisition will ensure that you take the right steps and make informed decisions.
Motiva Business Law’s acquisition attorneys will ensure to write a non-binding letter of intent that includes the general terms of the transaction, contains protection provisions, and serves as a foundation for the final purchase agreement.
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What is a letter of Intent?
A Letter of Intent (LOI), sometimes also referred to as a term sheet, is a formal document expressing the intention of parties to enter into a business transaction. While most of the time it is not legally binding, an LOI sets the framework for further negotiations and outlines the key terms and conditions of the proposed deal. Though it may not carry the same weight as a contract, an LOI is a crucial initial step in signing commitment and initiating discussions.
LOIs are used in various business scenarios, including mergers and acquisitions, partnerships, joint ventures, or any other situation where parties are exploring a potential business relationship but are not yet ready to enter into a legally binding agreement. A well-drafted and comprehensive LOI serves as a crucial tool in the negotiation process.
Key negotiation terms of the business purchase LOI
- The Parties Involved.
- A Description of the Transaction.
- Purchase/Sale Price.
- Terms of Payment.
- Condition Precedent.
- Termination Provisions.
- Exclusivity or NDA (Non-Disclosure Agreement).
- Governing Law and Jurisdiction.
- Binding or Non-Binding Nature.
Have Seamless business transactions and minimize risks
Motiva Business Law’s attorneys are dedicated to facilitating smooth transactions for business buyers. They begin by drafting punctual letters of intent, setting the stage for successful negotiations and agreements. Furthermore, they provide comprehensive due diligence services, ensuring that buyers have a clear understanding of the risks and opportunities associated with their potential acquisition. Additionally, Motiva’s attorneys excel at drafting accurate asset and stock purchase agreements that protect the interests of their clients while fostering positive relationships with sellers. Through their expertise and attention to detail, they strive to guide business buyers through every step of the transaction process with confidence and efficiency.
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What Our Clients Say
Generally, letters of intent are not binding, unless the parties to the LOI intentionally make it binding.
With a binding LOI, the consequences of a breach depend on the LOI and the nature of such breach. If the LOI is not binding. Parties may move on from the transaction as they wish.
Generally speaking, major terms of a LOI are negotiable. However, how much bargaining power a party has is determined by its leverage over the other party in negotiations.