Letter of intent in a business sale: which documents to gather at this stage

What a letter of intent actually commits the parties to

A letter of intent states the buyer's intention to acquire the business on a set of indicative terms: a price or price range, the intended structure (a share deal or an asset deal), an exclusivity period during which the seller agrees to stop discussions with other buyers, and a rough timeline through to closing.

The substance — price, final terms — is generally non-binding: it can, and often does, move once due diligence exposes things the LOI was drafted without seeing. The exclusivity clause, on the other hand, is frequently binding, and it's the clause both sides negotiate hardest, since it determines how much leverage the seller keeps once the ink is dry.

Why the documents at this stage matter

A letter of intent built on verbal claims and a rough set of numbers looks fine on paper — until due diligence starts and the real figures don't match what informed the price. That gap gets litigated hard in the following weeks, usually to the seller's disadvantage. An LOI backed by documents that were actually reviewed, even briefly, holds up far better once the process moves into detailed diligence.

The documents needed to draft or receive a credible LOI

At this stage, the goal isn't to open everything — it's to have enough verified information that the indicative terms are grounded in something real, without exposing the sensitive detail that due diligence will eventually cover.

• The last three years' annual accounts, or at minimum the filed tax returns
• A legal group structure chart: parent company, subsidiaries, and shareholding percentages
• A teaser-style company presentation: activity, market position, key figures, high-level organisation
• The ownership and shareholding structure — who holds what, and any existing shareholders' agreement

What still stays closed at this stage

Named client and supplier contracts, detailed HR files, litigation detail and tax audit history don't need to move before the LOI is signed, and generally shouldn't. This mirrors the Tier 1 / Tier 2-3 logic we cover in detail in our due diligence data room checklist: general documents circulate before the LOI, while anything sensitive or granular only opens once the buyer has committed and signed a confidentiality agreement.

Holding that line protects the seller if the buyer walks away before signing — which happens more often than either side expects at this stage.

What changes once the LOI is signed: entering due diligence

Once the letter of intent is signed, the process shifts into gear: the buyer's advisers — lawyers, accountants, sometimes a dedicated due diligence team — start working through a formal data room, folder by folder. We've written a dedicated article covering that full structure: the standard data room organised into legal, financial, commercial, HR, assets, risks and tax-social folders, along with the Tier 1/2/3 sequencing that governs what opens when. If the LOI stage is about establishing enough trust to agree on indicative terms, the data room stage is about verifying every one of them. In a share deal, this due diligence material also grounds the later negotiation of a warranty and indemnity package — see our dedicated article on warranty and indemnity in a business sale, which documents to gather.

Why timing documents right protects the deal

Releasing sensitive information too early creates real exposure if the buyer walks away with no deal signed — a competitor, or a future competitor, has just seen client concentration data or key contracts for nothing. Releasing too little for too long, on the other hand, stalls momentum and starts to look like the seller has something to hide.

The practical rule holds regardless of who's running the process: general, low-risk documents move before the LOI; anything that reveals contract terms, individual employee data or legal exposure waits until after signature.

The advisor's role: centralizing documents across multiple stakeholders

In practice, the documents needed for an LOI rarely sit in one place. The business owner holds the strategic narrative and often the informal knowledge of how the business really runs. The CFO or finance team holds the figures. The accountant holds the statutory accounts and tax filings. The lawyer holds the cap table, the corporate documents and any existing shareholder agreements.

The advisor's job is to chase all four, reconcile what they provide, and hand the buyer one clean, consistent package — rather than a set of documents that contradict each other on basic facts like shareholding percentages or the prior year's revenue.

Keeping the collection organised without chasing each contact separately

The same problem shows up here as in any multi-party document request: email scatters requests and responses across four separate inboxes, sensitive documents end up forwarded further than intended, and nobody has a clear view of what's still missing before the LOI can be drafted.

A structured checklist per stakeholder, sent through a secure portal rather than by email, fixes most of that: the owner sees their part, the accountant sees theirs, access stays limited to what each contact actually needs to provide, and reminders chase the slow ones automatically. By the time the LOI is ready to sign, the advisor already has a clean starting point for the data room that follows.