A formal business letter can function in many different ways under many different settings. It can introduce a job candidate to a potential employer, summarize the key points of a meeting or document an important conversation. Though a formal business letter can take many shapes, the skeleton and format of this letter rarely varies.
A formal business letter typically introduces an individual or firm to another, negotiates or sums up an act of business or functions as the day-to-day communication between business colleagues. Many business letters introduce, summarize or negotiate any potential business activity that may have occurred over lunch, golf or a friendly conversation at a networking event.
Many official matters of business are handled with the exchange of formal business letters. They put all thoughts, exclamations, complaints, reprimands and agreements in writing, formally documented. A formal business letter can even be the key piece of evidence in small claims court when debating what was or was not said or agreed upon.
There are many different forms of business letters, depending on what kind of "business" you're attempting to conduct. If you're looking for a job, you may send a formal business letter to a potential employer. If you're documenting an insubordination, you may send a formal business letter to the employee you're reprimanding that outlines what you discussed and what course of action will be taken. Formal business letters can also inquire about another company, open the door to a business transaction, or summarize a variety of events or behaviors that have occurred.
Though formal business letters put many plans, intentions and future activities in writing, they are typically not the only type of business document that is needed to complete a deal or transaction. Formal business proposals are usually created when one party seeks to do business with another. Contracts are also almost always needed in business ventures to make an agreement legal and binding. Even though a formal business proposal may document in writing what would have otherwise been considered heresy in a court of law, it does not typically hold up as a legitimate contract.
Most people limit their formal business letters to one page in length. This includes the date, formal signature that usually takes up five or six lines, and includes a company's name and address. It also includes an address line that includes the addressee's name, title, company and company address. With all this information needed, the body of most formal business letters usually consists of three concise paragraphs. Many people often use bullet points in formal business letters as well, as bullet points can help people sum up their points in an easy, succinct manner.