What is a letter of intent to purchase?

Answer

A letter of intent to purchase is a formal business document that is issued from one firm to the enterprise it wishes to acquire. This is exchanged when a company buys outright the rights, assets and operational resources of another business. It lays out the intent to buy and the amount of the transaction taking place, as well as other stipulations and conditions involved in the agreement.

Creating a letter of intent to purchase is the first formal step in creating a merger or acquisition between a private party or a corporation and another business. This requires that the legal aspects of such a purchase are already reviewed and the process is preliminarily set to proceed.

A letter of intent to purchase names the buyer and the company or items being bought. It lists the value of these assets, both liquid and otherwise, and provides a summary of what is to be paid for these resources. The document provides a timetable for the deal to be completed and serves as an initial phase in contract negotiations that signals an investor is fully committed to going ahead with the transaction. Such a letter also details the intended outcome of what the purchase is meant to accomplish.

Q&A Related to "What is a letter of intent to purchase?"
1. Write a short first paragraph that bluntly explains the nature of the agreement. A letter of intent is a business letter, not a letter between friends, and calls for clear, concise
http://www.ehow.com/how_6802828_write-letter-inten...
A letter of intent is a letter written showing what the plan is for the company. It will outline what you want and how long it will take to get it done and the projected cost.
http://www.ask.com/web-answers/Business/Management...
LOI is for giving work to Employer. Purchase order is for Components in work (Like Materials) Simply. LOI- WORK. PO - Material.
http://wiki.answers.com/Q/What_is_the_Difference_b...
1. Read the instructions. All applications, proposals or other procedures requiring a letter of intent will have specific instructions regarding what information will be required
http://www.wikihow.com/Write-a-Letter-of-Intent
1 Additional Answer
Ask.com Answer for: letter of intent to purchase
How to Write a Letter of Intent to Purchase
While a verbal agreement can be binding, any major sale should be finalized with a letter of intent indicating the terms of the agreement both parties have discussed for the purchase. A letter of intent with signatures from both parties can help both the... More »
Difficulty: Moderately Easy
Source: www.ehow.com
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