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ABCs of Letters of Intent and Term Sheets

Posted by Richard Ludlow on Mon, Apr 04, 2011 @10:23 AM

In a business sale transaction, the parties, through their negotiations and discussions, initially may reach a meeting of the minds on the basic terms of the deal such as price, timing and other major issues. The next step is typically for one of the parties to have his or her attorney draw up the definitive sale documents that will be signed as part of the transaction. However, the drafting process can sometimes be costly and time consuming, and thus it is often advisable for the parties to sign a “letter of intent” or “term sheet” to memorialize the basic terms of the deal and to make sure that both parties are clearly in agreement on those basic terms. 

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Topics: Selling your business, selling business action plan