Document background
The Letter of Intent to Purchase Business is a crucial preliminary document in Malaysian business acquisitions, serving as a stepping stone between initial discussions and the final purchase agreement. It is typically used when a potential buyer has serious interest in acquiring a business and wants to formalize their intent while maintaining flexibility. The document outlines key terms including proposed purchase price, exclusivity period, and due diligence requirements, while establishing confidentiality obligations. Under Malaysian law, particularly the Contracts Act 1950 and Companies Act 2016, most provisions are non-binding except for specifically identified binding elements such as confidentiality and exclusivity clauses. This document helps structure negotiations and provides a clear framework for progressing toward a definitive agreement.
