Document background
The Letter of Intent to Purchase Business is a crucial preliminary document in Hong Kong business acquisitions that bridges the gap between initial discussions and final binding agreements. It is typically used when a potential buyer has serious interest in acquiring a business and wants to formalize their intent while maintaining flexibility for negotiations. The document follows Hong Kong commercial law principles and combines both non-binding elements (such as proposed purchase price and structure) with binding provisions (like confidentiality and exclusivity). It serves multiple purposes: documenting the key terms of the proposed transaction, providing a framework for due diligence, setting timelines for negotiations, and demonstrating commitment from both parties. This document is particularly important in Hong Kong's dynamic business environment, where it helps establish clear expectations and protect both parties' interests during the negotiation phase.
