Document background
A Letter of Intent (LOI) for Business Purchase is a crucial preliminary document used in business acquisition transactions in the Philippines. It is typically employed when a potential buyer has serious interest in acquiring a business and wants to formalize their initial understanding with the seller before proceeding with detailed due diligence and negotiations. The document outlines key terms such as the proposed purchase price range, payment structure, exclusivity period, and confidentiality requirements. While primarily non-binding, certain provisions like confidentiality and exclusivity are usually binding. The LOI must comply with Philippine law, including the Civil Code, Corporation Code, and relevant regulatory requirements, particularly if the transaction involves regulated industries or foreign ownership considerations. This document serves as a roadmap for the transaction and helps parties align their expectations before investing significant resources in the acquisition process.
