An LOI (letter of intent) is a legal document that expresses the intent of both a seller and buyer to work towards a transaction to pass on shares or assets of an existing business. An LOI can be legally binding or non-binding based upon what both parties agree. The LOI describes the main points of the planned business purchase with significant detail. The LOI normally is put in place after various meetings have been held and detailed information has been exchanged but before the due diligence phase has started. The points of the LOI are later incorporated in the (share purchase agreement) so it is important to have a clear and well-documented LOI.