Hi All,

A letter of intent is a document between a prospective buyer and the seller, which outlines the terms and conditions of proposed transactions directing and facilitating the negotiation of final terms, terms of legal purchase, and deposit amount with due diligence and by both parties need to sign.

Bonnie would need to have a letter of intent constructed.

Due diligence allows the buyer to understand the business and confirms that the acquisition is the right decision. Bonnie would need to provide comprehensive financial and legal documents with various other information so the buyer can authenticate that all the vital documents have no significant issues.

The following documents are what Bonnie has to have ready:

The lease agreement between Sassy/Harry, and Bonnie for 1 Maiden Lane Non-disclosure confidentiality agreements An offer to purchase agreement Financial statements (past and current) Bonnie's discretionary earnings statement Aged trial balance reports for accounts payable and receivable Asset depreciation A list of fittings, fixtures, and other equipment Business licences, certifications, registration, and maintenance agreements Supplier and distributor contracts Insurance agreements Procedural and employment policy manuals All integral documents must be made voluntarily accessible and checked when a business is up for sale. Some documents have substantial value when a seller is interested in purchasing a business. Business licenses, such as the franchise name and logo, are an integral part of the selling process. Several salespeople are working for the company; hence non-disclosure confidentiality agreements take high priority. Business furnishings and equipment in the trophy room are also vital for due diligence. Ceramic treasure items such as vases and related documents are integral when selling her real estate brokerage business.

The entire database of clients and all the other accounting information saved within software developed by Fred are to be made voluntarily accessible to the buyer who has signed a letter of intent. All the parties associated with documents must be present to prevent mismanagement and have a legal sale.

However, I find that software development might be questionable and suggest that Bonnie get a reputable software development company to rewrite the program or disclose it to the buyer so that they have the opportunity to either fix or reject the offer.

Reference:

Business law in Canada, Eleventh Canadian Edition (11th edition): Yates, Richard A., Bereznicki-Korol, Teresa, Clarke, Trevor: 9780133847130: Books. (n.d.). Retrieved November 21, 2022, from https://www.amazon.ca/Business-Canada-Eleventh-Canadian-11th/dp/0133847136

Letter of intent for a business acquisition. (2022, August 16). Retrieved November 21, 2022, from https://www.bdc.ca/en/articles-tools/start-buy-business/buy-business/letter-intent-confidentiality-agreement-business-acquisition-clauses-included#:~:text=A%20document%20between%20a%20seller,a%20formal%20purchase%20offer%20does.

Murphy, C. (2022, July 08). Tangible assets vs. intangible assets: What's the difference? Retrieved November 21, 2022, from https://www.investopedia.com/ask/answers/012815/what-difference-between-tangible-and-intangible-assets.asp

Great work Vinetta! I appreciate your point on confidentiality agreements. These can either be indefinite or for a set period of time. Do you have a sense of the timeline that would be appropriate given this situation?