Letter of Intent - LOI

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DEFINITION of 'Letter of Intent - LOI'

1. An agreement that describes in detail a corporation's intention to execute a corporate action. The letter of intent is created by the corporation with its management and legal council, among others, and outlines the details of the action.

2. A document that can be used by parents to outline the thoughts and hopes that they have regarding their children in the event that the parents die. The courts use the information contained in the letter of intent to determine what happens to the children.

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BREAKING DOWN 'Letter of Intent - LOI'

1. Letters of intent are used during the merger and acquisitions process to outlines a firm's plan to buy/take over another company. For example, the letter of intent will disclose the specific terms of the transaction (whether it is a cash or stock deal).

2. Unlike wills, letters of intent are often not legal documents. However, because a letter of intent represents the wishes and desires of the parents, the courts will still often use it as a benchmark in conjunction with other documents to determine what happens to the children.

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RELATED FAQS
  1. What is the difference between a letter of intent and a memorandum of understanding?

    A letter of intent is likely to encompass a number of different aspects, and it varies in length according to the level of ... Read Full Answer >>
  2. How does a letter of intent work in the context of mergers and acquisitions?

    A letter of intent, or LOI, is used to set forth the terms of a proposed merger or acquisition. It is usually the first step ... Read Full Answer >>
  3. Can I put my IRA in a trust?

    You cannot put your IRA in a trust while you are living. You can, however, name a trust as the beneficiary of your IRA and ... Read Full Answer >>
  4. How long does it take to execute an M&A deal?

    Even the simplest merger and acquisition (M&A) deals are challenging. It takes a lot for two previously independent enterprises ... Read Full Answer >>
  5. How does the trust maker transfer funds into a revocable trust?

    Once a revocable trust is created, a trust maker transfers funds or property into the trust by including them in a list with ... Read Full Answer >>
  6. What are some common accretive transactions?

    The term "accretive" is most often used in reference to mergers and acquisitions (M&A). It refers to a transaction that ... Read Full Answer >>

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