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.

INVESTOPEDIA EXPLAINS '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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