{"id":4660,"date":"2017-04-25T13:00:57","date_gmt":"2017-04-25T18:00:57","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/closing-a-business\/what-is-a-letter-of-intent.html"},"modified":"2026-07-01T00:58:00","modified_gmt":"2026-07-01T05:58:00","slug":"what-is-a-letter-of-intent","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/closing-a-business\/what-is-a-letter-of-intent.html","title":{"rendered":"What Is a Letter of Intent?"},"content":{"rendered":"\n
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What Is a Letter of Intent?<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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A broker listing agreement is a legally binding contract between a business owner and a broker that outlines the terms, duration, and commission fees for selling a company. By signing this document, both parties protect their financial interests and clarify expectations before beginning the sales process.<\/p>\n\n <\/div>\n\n\n\n

A small <\/span>business<\/span> owner<\/span> has many factors to consider when selling their business. One important factor is whether or not to hire a business <\/span>broker<\/span><\/strong><\/a> to assist in the sale. An experienced broker can provide significant value to a business owner<\/span>. However, business owners<\/span> should pay special attention to several parts of the business <\/span>listing agreement<\/span> before signing it.<\/p>\n

This article discusses the factors a small <\/span>business<\/span> owner<\/span> may consider before signing a broker listing agreement<\/span>. It describes business brokers<\/span> and the value they can provide to buyers and sellers before examining\u00a0the broker listing agreement<\/span>, including specific terms and clauses to consider.<\/p>\n

Business Brokers<\/span> Explained<\/strong><\/h2>\n

Business brokers<\/span> assist business owners<\/span> in buying or selling businesses<\/strong><\/a>. Think of them like real estate<\/span> agents for businesses.<\/p>\n

An experienced business broker<\/span> understands the ins and outs of purchasing or selling businesses. They can help with the proper paperwork and most other requirements, such as licensing<\/strong><\/a>. All this can lead to a higher selling price<\/span> or a lower purchase price<\/span> for their clients.<\/p>\n

For sellers, the advantages of working with a business broker<\/span> include the following:<\/p>\n