Letter of Intent Sample for New Business

LETTER OF INTENT (LOI) – ACQUISITION / JOINT VENTURE

DOCUMENT CONTROL

• Effective Date: [Insert Date]
• Version: 1.0
• Jurisdiction: [State/Province/Country]
• Scope: Preliminary Agreement for Business Formation/Acquisition

1. LEGAL DISCLAIMER

NOTICE: This Letter of Intent (the "LOI") is intended to serve as a non-binding expression of interest, except for specific clauses expressly stated as binding (Confidentiality, Exclusivity, and Governing Law). This document does not constitute a final binding agreement to enter into a transaction. Parties should consult with qualified legal and tax counsel before execution.

2. PARTIES

• Party A: [Full Legal Name of Individual/Entity], located at [Full Address], referred to as the "Proposer."
• Party B: [Full Legal Name of Individual/Entity], located at [Full Address], referred to as the "Recipient."

3. OPERATIVE CLAUSES

1. OBJECTIVE: The Parties intend to enter into a definitive agreement for the purpose of: [Describe specific business objective, e.g., acquisition of assets, formation of a joint venture, or merger].

2. TRANSACTION TERMS: The Parties anticipate the transaction shall involve:

• Consideration: [Amount or Equity Percentage]
• Payment Terms: [Method of payment/Escrow details]
• Closing Date: On or before [Date]

3. CONFIDENTIALITY (BINDING): During the term of this LOI and for a period of [Number] years following its termination, both Parties agree to maintain the strict confidentiality of all proprietary information disclosed during due diligence.

4. EXCLUSIVITY (BINDING): For a period of [Number] days from the Effective Date, the Recipient agrees not to solicit, initiate, or encourage any discussions or proposals with third parties regarding a similar transaction.

5. DUE DILIGENCE: Upon execution, the Proposer shall have the right to conduct a comprehensive legal, financial, and operational audit of the business. The Recipient agrees to provide reasonable access to books, records, and relevant stakeholders.

6. TERMINATION: This LOI shall terminate upon (i) the execution of a definitive agreement, or (ii) written notice by either party. Clauses 3, 4, and 7 survive termination.

7. GOVERNING LAW: This LOI shall be governed by and construed in accordance with the laws of [Jurisdiction]. Any dispute arising hereunder shall be resolved through mandatory arbitration in [City/State].

4. SIGNATURES & ACKNOWLEDGMENT

Executed this [Day] day of [Month], [Year].

Proposer: Signature: __________________________ Printed Name: [Name] Title: [Title]

Recipient: Signature: __________________________ Printed Name: [Name] Title: [Title]

5. EXECUTION GUIDE (OPERATIONAL PROTOCOL)

• Due Diligence Phase: Prior to signing, ensure the "Proposer" has provided a comprehensive Data Request List. Do not execute if financial disclosures are withheld.
• Binding Clause Verification: If the "Exclusivity" (No-Shop) period is intended to be legally binding, ensure that consideration (even if nominal) is acknowledged to satisfy contract formation requirements in the applicable jurisdiction.
• Legal Review: Submit the finalized draft to legal counsel specifically to verify that Clause 7 (Governing Law) aligns with your corporate domicile to avoid unfavorable venue selection.
• Version Control: Once signed, distribute encrypted, PDF/A copies to both parties. Mark the original as "Executed LOI" and store it in your corporate repository (Virtual Data Room).