Document background
The Stock Purchase Letter of Intent is a crucial preliminary document used in Canadian business transactions when one party intends to purchase shares in a company from existing shareholders. This document, while typically non-binding except for specific provisions such as confidentiality and exclusivity, sets out the essential terms and framework for the proposed transaction. It is commonly used during the initial stages of negotiations to ensure all parties have a clear understanding of the key commercial terms before proceeding with detailed due diligence and drafting the definitive agreements. The document must align with Canadian securities regulations and corporate law requirements, which may vary by province. It typically includes provisions for purchase price, payment terms, due diligence processes, timelines, and conditions precedent, while allowing flexibility for negotiations as the transaction progresses.
