subject: Serious About Buying A Business? Make Sure You Use A Letter Of Intent [print this page] When purchasing the assets of a company, finding a good letter of intent may not be easy for everyone nor may a good one be easily available especially when you are in need of it most. You may have a general idea and some time to spare to write one for yourself, but you might be slamming the door on yourself if it does not turn out to be effective and useful for those who will be using it. Such a letter of intent to purchase the assets of a company is sure to be carefully drafted, keeping in mind general terminology as well as including salient points that ought to cover all the legal aspects to the satisfaction of the users.
The letter of intent to purchase the assets of a company will enable all persons concerned to specify the terms and conditions prior to the writing of a formal asset purchase agreement. It should be concise and lay down the various key points that will prove its value and help facilitate good business purchases. The letter of intent to purchase assets of a company should include:
* Facilitating negotiations between the parties, although it is not a legal contract and so not legally binding.
* The new company so incorporated by the buyer will lead to his buying up all the assets as well as goodwill of the business from the seller.
* In case the deal falls through, the seller will reimburse the buyer his cost plus a percentage of the agreed purchase price in the form of liquidated damages.
The format of the letter of intent to purchase assets of a company will expressly name both the buyer and seller and furnish relevant details such as their addresses, phone and fax numbers. It will further state that the purchaser is interested in purchasing 100% of the assets of the seller in the form of an incorporation that is to be formed by the purchaser. The date of completion may be termed "closing date" and the amount of compensation plus any other liabilities will be followed as per the terms and conditions of the letter of intent to purchase assets of a company. The transfer of ownership shall then pass into the hands of the purchaser.
The purchaser and the seller will no doubt make a serious effort in finalizing and executing a definitive asset purchase agreement (the definitive purchase agreement) that will define the transaction, which will hold all the terms that need defining. These may include terms such as expiration date as well as all the other relevant provisions that were agreed to by the two parties. Further, the transaction might include all the assets of the company which could comprise all rights, titles and selected interests in any patents, trademarks and trade names as well as technical processes, expertise or all other intellectual property rights developed or connected or otherwise linked with the business of the company, whether it has been registered or not.
by: Wade Anderson
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