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Stock (Shares) Purchase Letter of Intent

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The stock purchase letter of intent is used to establish an agreement for the purchase of shares in a business such as a corporation, company (LLC), or partnership. The agreement may be used for public and privately traded companies. If shares of a privately owned company are being purchased, the buyer may need to view the business’s corporate bylaws, operating agreement, or the partnership agreement (depending on the entity type), as the official ownership interest is located in these documents.

Table of Contents

What is a Stock Purchase Letter of Intent?

A stock purchase letter of intent is used for the purchase of a limited number of stocks in a company or corporation from an individual or entity that owns the desired shares. A letter of intent is often non-binding and is instead a preliminary offer prior to the signing of a purchase agreement. However, the letter may be made binding and, furthermore, may promise the payment of a deposit to the seller upon the signing of a formal agreement. The document covers the purchase price and transaction arrangement, as well as a variety of stipulations that assure confidentiality and exclusivity. If all interested parties sign the letter, a purchase agreement must be sent to the seller within the time-frame indicated by the buyer in the document.

Stock Purchase Letter of Intent – Sample

STOCK PURCHASE LETTER OF INTENT

  

Denise Van Raalte
216 Fraser Road
Detroit, Michigan 48026

Effective Date: March 1st, 2020

Charles Henderson
4730 Crestwood Drive
Detroit, Michigan 49518

 

RE: Letter of Intent for the Proposed Purchase of Stock

 

This stock purchase letter of intent (“Letter of Intent”) represents the basic terms for an agreement that shall be considered non-binding. After this Letter of Intent has been made, another formal agreement may be constructed to the benefit of the Parties involved.

I. The Buyer: Denise Van Raalte (the “Buyer”) with a mailing address of 216 Fraser Road, City of Detroit, State of Michigan.

II. The Seller: Charles Henderson (the “Seller”) with a mailing address of 4730 Crestwood Drive, City of Detroit, State of Michigan.

The Buyer and Seller, when mentioned together, shall be referred to as the “Parties”.

III. Company: The Parties agree that the shares of capital stock mentioned in this Agreement are of Henderson Printing LLC (the “Company”) located with a principal office address in the State of Michigan.

IV. Shares. In accordance with the terms set forth in this Agreement, the Seller agrees to sell One Thousand (1,000) shares of A-class stock of the Company (“Stock”).

V. Purchase Price: The total purchase price shall be Four Thousand Eight-Hundred Fifty-Eight Dollars ($4,858.00) for the Stock. The Buyer shall be obligated to complete the purchase with a closing date no later than June 1st, 2020 (“Closing Date”).

VI. Deposit: With the signing of this Letter of Intent, the Parties agree that:

Deposit is NOT Required: The Buyer shall not be required to make payment at the time of signing this Letter of Intent.

VII. Formal Agreement: After the signing of this Letter of Intent:

Formal Agreement Required: A formal agreement shall be constructed by April 30th, 2020 based off the terms in this Letter of Intent (“Formal Agreement”). If there is no Formal Agreement created, or the Parties could not agree to the details by the Closing Date, this Letter of Intent shall be considered null and void.

VIII. Confidentiality: All negotiations regarding the Business between the Buyer and Seller shall be confidential and shall not to be disclosed with anyone other than respective advisors and internal staff of the Parties and necessary third (3rd) parties. No press or other public releases will be issued to the general public concerning the Business without the mutual consent of the Parties or as required by law, and then only upon prior written notice to the other party unless otherwise not allowed.

IX. Good Faith Negotiations: The Buyer agrees to act in an honest and diligent manner to enter into “good faith” negotiations in order to execute a formal agreement and/or close the transaction.

X. Exclusive Opportunity: Following the execution of this Letter of Intent, the Parties agree not to negotiate or enter into discussions with any other party unless there are any existing agreements in place (e.g. option to purchase, first right of refusal, etc.).

XI. No Public Announcement: The Parties agree not to make any public announcement with regard to the transaction contemplated by this Letter without the prior written consent of the other. Additionally, each of the Parties shall bear their own costs and expenses related to the transaction contemplated by this Letter, including, but not limited to, fees and expenses of legal counsel and accountants.

XII. Currency: All mentions of currency or the usage of the “$” icon shall be known as referring to the US Dollar.

XIII. Governing Law: This Letter of Intent shall be governed under the laws by the State of Michigan.

XIV. Counterparts and Electronic Means: This Letter of Intent may be executed in several counterparts, each of which will be deemed to be an original and all of which will together constitute one and the same instrument. Delivery to us of an executed copy of this Letter of Intent by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery to us of this Letter of Intent as of the date of successful transmission to us.

XV. Severability. In case any provision or wording in this Letter of Intent shall be held invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

XVI. Acceptance: If the Parties are agreeable to the aforementioned terms, this Letter of Intent must be authorized by no later than April 1st, 2020.

IN WITNESS WHEREOF, the Parties have executed this Letter of Intent on the day and year written below.

 

BUYER

Buyer’s Signature ______________________ Date ______________________

Print Name ______________________

 

SELLER

Seller’s Signature ______________________ Date ______________________

Print Name ______________________

How to Write a Stock Purchase Letter of Intent

Download in Adobe PDF, Microsoft Word (.docx), or Open Document Text (.odt).

Step 1 – Obtain This Template To Issue A Stock Purchase Letter Of Intent

The letter template available on this page is geared to solidify a Potential Shareholder’s intent to purchase stock from a specific entity. This paperwork is useable as an “Adobe PDF,” “Microsoft Word (.doc),” or “Open Document Text (.ODT)” file at your discretion. Direct your attention to the links above or the buttons labeled as such to make your selection.

 

Step 2 – Produce The Sender’s Full Name And Return Address

The Sender of this letter may be the Company whose stocks will be purchased or the Potential Shareholder who will purchase them. Whichever of these entities prepares and sends this paperwork must be presented by name and return address at the start of this page. 

 

Step 3 – Declare This Letter’s Official Date Of Effect

It is imperative for any timelines involved or simply good filing practices that this letter is attached to the date when it is first generated as an active document. The next line (“Effective Date”) requests this date entered as the first month, day, and year this paperwork relates to the Parties involved. 

 

Step 4 – Report The Delivery Address For This Letter

The Recipient of this letter can also be either of these Parties (depending on the Sender) and must also be named. The three lines placed between the date you assigned, and the body of the letter are reserved for the name and delivery address of the letter’s Recipient. 

 

Step 5 – Furnish This Document’s Binding Status

In addition to the date of this letter’s effect, documentation as to how powerful that effect is must be included. The first paragraph beneath the subject line presents two checkboxes (“Binding” and “Non-Binding”). To complete the paragraph one of these checkboxes must be marked. For instance, if both Parties expect this letter to be enforceable in a court of law, then mark the first checkbox (“Binding”).  However, should neither Party expect this to be enforceable in a court of law then mark the “Non-Binding” checkbox. 

 

Step 6 – Record The Stock Buyer’s Identity

The remainder of this letter presents its contents in the form of several articles – each dealing with specific subject matter. The article titled “I. The Buyer” seeks a report on the Party who shall purchase shares of the concerned Company. The first available space in this paragraph is labeled “The Buyer” by the parentheses term that follows it. Enter the legal name of the intended Purchaser to this area.  Continue through this paragraph by producing the building, street, and suite number of the Buyer’s mailing address on the space before the term “City Of” then the accompanying city on the space that follows these words.  The last available space in this paragraph requires the state of the Buyer’s mailing address recorded to its contents. This will complete the process of identifying the Buyer before the signing so make sure that up-to-date information is displayed. 

 

Step 7 – Document The Seller Behind The Concerned Shares

The full name of the Seller will be the first required entry in “II. The Seller.” This is the Party that currently controls the shares and possesses the right to sell them. Report the Seller’s legal name on the first blank space. The formal building number, the street, and the applicable suite number or P.O. Box used in the business address of the Company issuing these shares in this transaction must be produced on the second blank space in “II. The Seller” while the third space requires a report on the city in this address. Finally, the state where the Seller’s address requires mail directed should be furnished on the final blank space in “II. The Seller.”

 

Step 8 – Identify The Share Company’s Information

The next entity that will be identified in this letter is the Company whose shares are being discussed here. The full name of this Company, including the legally registered suffix (i.e. “Inc.”) must be placed on the first space in “III. Company.”    The second space in “III. Company” requests the state where the concerned Company was legally formed and operates reported.

 

Step 9 – Define The Shares That Will Be Purchased

In “IV. Shares,” the number of shares that will be purchased must be recorded on the space after “The Seller Agrees To Sell…” This must be followed through to the type or class of stock being purchased.  

 

Step 10 – Discuss The Required Payment For The Concerned Shares

In “V. Purchase Price,” enter the amount required for these shares as a written report on the first available space. Complete this statement by recording the same dollar amount as a number on the space attached to the dollar sign.  It is customary for a specific due date to be assigned as a “Closing Date.” Locate the term “….A Closing Date No Later Than” then record the final month and calendar day when the purchase amount will be accepted for the concerned shares. Continue reporting the “Closing Date” by furnishing the two-digit year just before this parentheses label. 

 

Step 11 – Indicate If A Deposit Is Necessary

The checkbox statements in “VI. Deposit” focus on solidifying the Seller’s deposit requirements (if any). If there will be a deposit that must be submitted before this transaction can occur, then mark the “Deposit Is Required” checkbox.  Write out the full dollar value of the expected deposit on the first blank space of this choice. The second available space of the “Deposit Is Required” declaration will need the number representing the deposit amount recorded. If a deposit is needed for this transaction and the first checkbox statement in “VI. Deposit,” has been marked, then some clarification will be necessary. Two additional checkboxes are placed within this choice. If the concerned deposit is refundable then mark the box labeled “Refundable Under the Following Terms” and report these terms (even if there are “None”) on the blank lines provided. Once you mark this checkbox you may not select the one that follows. If the deposit is not refundable in any sense, then proceed to the next option leaving this option unattended.   If the deposit will not be refunded, then mark the “Non-Refundable” box. The previous choice may not be applicable because the “Deposit Is Not Required.” If this is the case, then mark the checkbox attached to these words. 

 

Step 12 – Solidify Whether A Formal Agreement Is Needed

This letter is developed to act with or without a formal agreement. If this letter requires that a formal agreement concerning the sale of this stock is issued as well then mark the first checkbox statement in the section titled “VII. Formal Agreement.” Notice the bold words “Formal Agreement Required” in this choice are attached to a paragraph that requires additional information. If a formal agreement must “…Be Constructed” then find the two available spaces statement where you must declare the due date of the formal agreement’s submittal. Keep in mind that if this checkbox is marked and a formal agreement is not submitted to both parties by the date you report, then this letter will automatically terminate its effect on both parties. Both Parties may expect this letter to operate independently of any formal agreement (meaning none will be needed). If this is the case, then mark the checkbox labeled “Formal Agreement Not Required.”

 

Step 13 – Present Jurisdiction Holding Authority Over This Document

Continue through the next few articles until “XIII. Governing Law.” The empty space after “…The Laws By The State Of” requires the name of the state whose jurisdiction applies to this paperwork. Furnish this content as requested.

 

Step 14 – Dispense The Latest Date Of Acceptance For This Letter

Naturally, since this letter will carry a basic sensitivity to time, a due date for both parties to show that each acknowledges and agrees to the terms contained must be documented. This final day when both signatures must be present lest these terms no longer apply to either Party, must be recorded using the two spaces in “XVI. Acceptance.” 

 

Step 15 – The Share Holder Must Execute this Letter

The Buyer purchasing the above-mentioned shares must sign the “Buyer’s Signature” line then produce the “Date” of this execution in the section labeled “Buyer” at the end of this letter.  In addition to the Buyer’s signature, the “Print Name” line below will expect a clearer version of this name.

 

Step 16 – The Seller Signature Will Complete

The Seller who will transfer ownership of the concerned stock to the Buyer once the terms of this letter have been met should sign the “Seller’s Signature” line then enter the current “Date” on the line adjacent to this. The order of these signatures does not matter – although both must be present before the end of the day documented in “XVI. Acceptance.”  The “Print Name” line beneath the Seller’s signature expects this Party’s name presented in typeface or print. 


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