Document background
A Letter of Intent to Purchase Business is a crucial preliminary step in Canadian business acquisition processes, typically used after initial discussions but before detailed due diligence and final agreements. This document is essential when a potential buyer has serious interest in acquiring a business and wants to formalize their intent while maintaining flexibility. It outlines key terms such as proposed purchase price, exclusivity period, and due diligence requirements, while generally remaining non-binding except for specific provisions. The document must comply with Canadian federal and provincial requirements, including considerations under the Business Corporations Act, Competition Act, and relevant provincial legislation. It serves as a foundation for further negotiations and helps both parties align their expectations before investing significant resources in the transaction.
