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LOI For Business Purchase for Germany

LOI For Business Purchase Template for Germany

A Letter of Intent (LoI) for business purchase under German law serves as a preliminary written agreement outlining the proposed terms and conditions for the acquisition of a business. This document, while primarily non-binding except for specific provisions such as confidentiality and exclusivity, establishes the framework for negotiation and due diligence processes. It incorporates key considerations under German corporate law, including provisions from the German Civil Code (BGB) and Commercial Code (HGB), while addressing specific requirements for business transfers under German jurisdiction.

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What is a LOI For Business Purchase?

The LoI For Business Purchase is a crucial preliminary document used in German business acquisitions to establish the initial framework for negotiations and future definitive agreements. It serves as a roadmap for the transaction, typically issued after initial discussions but before detailed due diligence and final negotiations. The document, while maintaining its primarily non-binding nature under German law, includes certain binding provisions such as confidentiality, exclusivity, and governing law clauses. It reflects specific German legal requirements and business practices, incorporating considerations from various German corporate and commercial laws. This type of LoI is particularly important in the German market where structured and documented preliminary agreements are common practice in business transactions.

What sections should be included in a LOI For Business Purchase?

1. Opening Address and Parties: Formal letter opening identifying the sender and recipient parties

2. Transaction Overview: Brief description of the proposed transaction and target business

3. Purchase Price Indication: Preliminary indication of the purchase price range and payment terms

4. Due Diligence: Outline of the proposed due diligence process and timeline

5. Timeline: Expected timeline for the transaction including key milestones

6. Non-Binding Nature: Clear statement about the non-binding nature of the LoI except for specific provisions

7. Closing Conditions: Key conditions that must be met before proceeding with the transaction

What sections are optional to include in a LOI For Business Purchase?

1. Management Retention: Terms regarding retention of key management personnel, used when management continuity is crucial

2. Post-Closing Integration: Basic framework for business integration, included when complex integration is anticipated

3. Employee Matters: Preliminary understanding on handling employees, included when significant workforce is involved

4. Financing: Overview of financing arrangements, included when external financing is required

5. Break Fee: Terms of any break fee arrangement, included in larger transactions or competitive situations

What schedules should be included in a LOI For Business Purchase?

1. Binding Provisions: List of provisions that are intended to be legally binding (confidentiality, exclusivity, governing law)

2. Target Business Description: High-level description of the target business, key assets, and operations

3. Key Terms Sheet: Summary of key commercial terms agreed in principle

4. Due Diligence Requirements: Initial list of due diligence requirements and information requests

5. Transaction Timeline: Detailed timeline with key dates and milestones

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Letter of Intent

Cost

Free to use
Relevant legal definitions






















Clauses

























Relevant Industries

Manufacturing

Technology

Retail

Professional Services

Healthcare

Real Estate

Financial Services

Industrial

Energy

Telecommunications

Automotive

Consumer Goods

Media & Entertainment

Logistics & Transportation

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Strategy

Executive Management

Business Development

Due Diligence

Corporate Finance

Risk Management

Compliance

Tax

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Corporate Development Director

Head of Mergers & Acquisitions

General Counsel

Legal Director

Finance Director

Business Development Manager

Investment Manager

Corporate Lawyer

Due Diligence Manager

Strategy Director

Integration Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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