![]() The main difference between the agreement described above and the MOU, also called a memorandum of understanding, is that it can be done by more than two parties. That's because, in that case, the LOI provides a certain basis for verification and negotiation of terms before a legally binding contract is entered into. In corporate actions, to cite just one example, LOIs are widely used as mergers, acquisitions and joint ventures (joint venture) before entering into a legal contract. Depending on the nature of the project, the level of negotiation can increase, so it is important to have details and accuracy in the information provided. It is the responsibility of those involved to guarantee the positions of each side so that the LOI can serve to protect the parties in the transaction that will take place later. After this procedure and the reading and understanding for negotiation, you can mark the signature itself. Generally, a letter of intent is presented by one of the two parties involved. The result of the activity, budget and other relevant financial information and the signature of the parties involved must be included in the document. The LOI should be clear and written in the form of a formal letter containing a summary of terms in the opening paragraph, general statement of activities to be implemented and how this process should flow. However, many of these agreements have legal provisions, such as exclusivity, disclosure, etc. The particularity of this type of agreement is that in the LOI only two parties can be involved, with no possibility of being formed between more than two parties under any circumstances.įurthermore, it is considered as a primary contract signed before formatting the formal contract, therefore it is not legally binding. The LOI stipulates an action, an agreement or a desire to achieve something, in addition, it is also cited as a letter of inquiry or a concept document. The LOI, known as a letter of intent or letter of intent, is an agreement that outlines the main points of a proposed contract and serves as a point of balance, of agreement between two parties. And within the merger or acquisition process of a company are the agreements, and we will talk about two in the next paragraphs: LOI and MOU. It can also be used to change the nature of business, bring more competitiveness to the market and promote the growth of a specific brand. In this sense, transactions enable both the purchase and sale of a brand or the reorganization of companies. M&A is part of a set of business operations in which institutions are measured and studied as investment alternatives. Before, however, let's recall the concept of M&A, the subject of several articles here on this blog: But let's talk separately about each one so that there is no doubt. In Mergers and Acquisitions (M&A) processes, or merger and acquisition processes of companies, they are widely used due to their characteristics and applications. The second, MOU, can be described as a bankruptcy between two or more parties to carry out a specific action or project. The first, LOI, in short, is an adjustment that describes the main points of the proposed contract and serves as an agreement between two parties. Used in business and personal transactions, LOI and MOU are documents that differ in terms of application.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |