A KEY MILESTONE
As your negotiations evolve, the Letter of Intent is the next major demarcation in the acquisition process. Its main purpose is to clarify the fundamental terms of the deal before either party commits additional resources (both time and money) to the process. As a legal document, the LOI does not commit either party to finalize the transaction. Its function is to summarize what agreements have been reached regarding the basic structure of the new business, while outlining what remains to be worked through.
In addition to its legal function, the LOI also serves a symbolic purpose. It provides a jump-start (or jump-restart) for the final phase of the acquisition process. With closing now in sight, it is a reminder to both sides ...
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