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Letter of Intent for a Business Venture

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Letter of Intent for a Business Venture Powered By Docstoc
					This Letter of Intent is used by a party seeking to enter into a proposed business
arrangement with another party. The letter of intent outlines the material terms and
conditions of the proposed agreement. It includes the purpose of the business entity,
each party's percentage of interest, and other additional terms. This document provides
a template for drafting a letter of intent and may be customized to fit the specific needs
of the parties. It should be used by a party seeking to enter into a business venture with
another party.
            LETTER OF INTENT FOR A BUSINESS VENTURE
TO:               ______________________ [Comment: Name & Address of Receiving Party]
FROM:             ______________________ [Comment: Name & Address of Offering Party]
DATE:             ______________________ [Comment: Insert Date Letter Sent]
SUBJECT:          ______________________ [Comment: Describe nature of proposed venture]


Dear ________________________ [Comment: Name of Receiving Party],

____________________ [Comment: insert Offering Party’s Name] (“Offeror”) offers this
Letter of Intent (“Letter”), outlining the mutual intent to enter into a proposed business
arrangement between Offeror and _________________ [Comment: insert Receiving Party’s
name] (“Offeree”) in regard to: __________________________ [Comment: describe nature of
proposed venture]. This Letter sets forth the terms and conditions that Offeror seeks to use as
material terms for the proposed agreement. This Letter supersedes, in its entirety any, and all
communications that previously occurred between the parties.

The Terms and Conditions proposed are as follows:

A.       Overall Structure

The mutual goal of the parties is to establish “____________________________” [Comment:
insert the name of the new entity being created] (“New Entity”), an entity to be jointly owned
by Offeror and Offeree. The general purpose and structure of New Entity is set forth as follows:
_______________________________________________________________.
[Comment: Describe in detail the nature of the business proposed, including responsibilities
and benefits of both parties, structure of New Entity, and purpose of creating New Entity].
Offeror agrees to: __________________________________________________ [Comment:
Duties of Offeror]. Offeree agrees to: __________________________________________
[Comment: set forth the duties of Offeree].

B.       Ownership

The registered capital for the above-entitled joint venture shall be ____________ dollars
($_________) [Comment: insert total equity] of which Offeror shall own _____ percent
(%_____) and Offeree shall own _____ (%____).

C.       Negotiation

The parties agree to enter into negotiations under the terms and conditions of this Letter so as to
determine whether this venture is viable for both parties. Both parties agree not to enter into
negotiations or solicit information or negotiations with any third party from receipt of this Letter


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until the term of negotiations has ended either under the Terms and Conditions of this Letter, or
by mutual agreement of the parties that negotiations have ended.

D.       Confidentiality

In the event that any confidential information should be exchanged between the parties as a
result of negotiations under the Terms and Conditions of this Letter, both parties shall agree to
make any necessary efforts to keep all such information confidential.

E.       Time

Parties shall make all reasonable efforts to end negotiation period within ___________ (__) days
of the receipt of this Letter by Offeree.

F.       Public Announcement

Neither party shall make any public announcement regarding negotiations under the Terms and
Conditions of this Letter or the formation of New Entity without the express consent of both
parties.

G.       Expenses

Any Expenses accrued pursuant to the Terms and Conditions of this Letter shall be paid as
follows [Comment: Describe all relevant proposed prices for products or services rendered by
both parties]: Offeror agrees to pay _______________ dollars ($___) [Comment: insert
proposed price] for ____________________ [Comment: insert proposed service(s)]. Offeree
agrees to pay _______________ dollars ($___) [Comment: insert proposed price] for
____________________ [Comment: insert proposed service(s)].

H.       Governing Law

All matters arising from this Letter and any subsequent related negotiations shall be governed by
the laws of the State of ___________________. [Comment: Insert state of governing law]

I.       Additional Terms of Transaction

         1.       ______________________________________________
         2.       ______________________________________________
         3.       ______________________________________________
                  [Comment: Include all relevant terms of business transaction, tailored to your
                  specific agreement, i.e. additional consideration, future negotiations, liabilities,
                  conditions precedent, closing dates, covenant not to compete, expenses,
                  arbitration agreement, venue clause]


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DOCUMENT INFO
Description: This Letter of Intent is used by a party seeking to enter into a proposed business arrangement with another party. The letter of intent outlines the material terms and conditions of the proposed agreement. It includes the purpose of the business entity, each party's percentage of interest, and other additional terms. This document provides a template for drafting a letter of intent and may be customized to fit the specific needs of the parties. It should be used by a party seeking to enter into a business venture with another party.
This document is also part of a package Business Planning Starter kit 22 Documents Included