Business Purchase and Sales

Purchasing or selling a business is generally more complex than purchasing or selling real estate. A purchaser must look not only at the leasehold arrangements but the ownership of chattels, the financial statements underpinning good will, the possibility of liens against assets, municipal and provincial licences, the vendor’s authority to sell and others. In the event that the vendor is a corporation, both parties must determine whether a purchase and sale of assets or shares is preferable.

A purchase and sale in bulk in Ontario (where essentially all of the business assets are sold) must be done under the Bulk Sales Act to protect the purchaser from creditors of the vendor. The vendor has to consider capital gains tax obligations, on-going obligations that survive closing and liability if the purchaser’s business fails. The purchaser must ensure that a properly drafted agreement provides the warranties that the purchaser can rely on in continuing the business.

An experienced solicitor gives the security of knowledge that the transaction has complied with all requisite laws and obligations.