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Free Sample letter of intent to purchase a business 2024
This post covers a sample letter of intent to purchase a business.
Since you are looking for a sample letter, should I assume that you know everything about the letter of intent to purchase a business?
No! I think I will not be fair!
I believe the sample will be more helpful if backed up with other significant information.
Therefore, here I will take you through
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What You’ll Gain:
- what is a letter of intent to purchase a business
- why a letter of intent to purchase a business is necessary
- How to write an effective letter of intent to purchase a business
- sample letter of intent to purchase a business
- etc.
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Related:
- Letter of intent to purchase real estate (guide + free sample)
- Letter of intent to lease real estate
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What is a letter of intent to purchase a business
A letter of intent to purchase a business is a brief statement of facts written by the person to show his intention to purchase a privately owned business from another person or organization.
For example, if John owns a business let’s say a retail shop and you want to buy that business, you may legally express your intention by writing John a letter of intent to purchase his business.
That’s how things work.
While it is more called a letter but it actually operates like an agreement/contract if not like an offer or proposal.
A letter of intent to purchase a business is used to establish and outline an understanding between two or more parties that serves as the foundation for a potential or proposed agreement.
If both parties agree, the letter of intent to purchase a business will have legal force. It will be enforceable, and the sale must be finished by the deadline.
Why do you need a letter of intent to purchase a business?
The following is why a letter of intent to purchase a business is necessary
- It will enable you to concentrate on the crucial provisions of the agreement without needlessly discussing the intricate points of the deal.
- It will provide you with a precise timeline for wrapping up the negotiation and finalizing the overall transaction.
- It lock-in the parties and prevent them from engaging with other parties on the same deal during the negation stage.
- etc.
How to write an effective letter of intent to purchase a business
A letter of intent to purchase a business is written in a business letter format. Begin your letter with your address and contact information, followed by a date and the potential seller’s address, and state that you are intending to purchase the seller’s business according to the terms that appear on your letter.
REMEMBER the aim of your letter of intent to purchase a business is to express your intention to purchase a business.
Therefore to write an effective letter of intent to purchase a business do the following
- Provide your name/organization, address, and contact information
- Include the date of the letter
- Include the potential seller’s name, address, and contact information
- Provide the details of the business you intend to buy (name, location, etc)
- Provide the proposed purchase price
- Provide the mode of payment
- Provide the timeline for the purchase
- State whether you wish the letter to be binding or not.
- Explain whether your intent includes the purchase of real estate or not.
- Explain who will bare the closing cost
- Provide a confidentiality clause
- Include the termination clause (how the intentions should be deemed to be terminated)
- Include the acceptance clause i.e how the intentions will be deemed to be accepted
- Maintain a professional tone
- Be honest
- Signatures
Sample letter of intent to purchase a business
The following is the Sample letter of intent to purchase a business
Your Name
Address
City, State, Zip Code
phone
email
website
DATE
[Potential seller’s Name]
[Potential seller’s Street Address]
[Potential seller’s City, State, and Zip Code]
Re: Intention to purchase your business [it is good to mention a business]
Dear [Potential seller’s last name]
It is with great enthusiasm I’m writing this letter to express my intention to purchase your business when we will agree upon the following terms and conditions proposed in this letter.
Effective Date
[write the date that this letter of intent will be deemed effective]
Buyer
[Insert the full name of the buyer]
Seller
[Insert the full name of the seller]
Business
[description of the business you intend to buy]
Real Estate
This Letter of Intent does not include real estate.
(if the purchase includes the real estate use the below clause)
Real Estate
This Letter of Intent includes real estate located at [location].
Legal Description: Block # Lot: #
Purchase Price: [$#]
Purchase price
The Buyer intends to buy the business and will enter into an agreement with the Seller for [$#]
Payment
Upon signing the business purchase agreement, a deposit of [$#] will be made; the balance will be paid upon closing.
Financing
The Buyer has made it known that this Letter of Intent is not conditional on their ability to obtain financing
Closing
The Closing should occur within the agreed timeframe following the formal business purchase agreement between the Parties
Closing Costs
All costs associated with the Closing shall be the responsibility of both parties, each bearing their own expenses.
Binding effect
This Letter of Intent should not be considered binding.
The terms outlined here are solely for the purpose of reaching a later agreement in the future, to which the Buyer and Seller are not bound.
(if you want the better to be binding, use the following clause)
Binding effect
This Letter of intent shall be considered binding.
Therefore, the parties acknowledge that remedies at law will be inadequate for any breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance.
The remedy of specific performance shall be cumulative of all of the rights at law or in equity of the parties under this Agreement.
Confidentiality
All negotiations regarding the Business between the Buyer and Seller shall be confidential and not to be disclosed to anyone other than respective advisors and internal staff of the parties and necessary third (3rd) parties.
No press or other public releases will be issued to the general public concerning the Business without mutual consent or as required by law, and then only upon prior written notice to the other party unless otherwise not allowed.
Governing Law
This Letter of Intent shall be governed under the laws of the State of [name of the state]
Termination
This Letter of Intent will terminate if there has not been a formal agreement signed within ten [#] days from the Effective Date.
Acceptance
If you agree to the above-mentioned terms, please sign this Letter of Intent and return the duplicate copy within five [#] business days after the delivery.
SELLER
Seller’s Signature __________ Date __________
Print Name __________
BUYER
Buyer’s Signature __________ Date __________
Print Name __________
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