Purchases and Sales

We assist our clients with the purchase and sale of the business which can be done by the sale of assets or sale of shares.

Share Purchase and Sale

Shares of a corporation are commonly sold from one person to another. The complexity of the transaction can vary and generally depends on the nature of the parties, the nature of the corporation whose shares are being sold, the value of the transaction and the risks associated with the transaction.

Asset Purchase and Sale

As an alternative to selling the shares of a business, a corporation can sell all of its assets to another corporation. One of the reasons this is done is so that the purchaser does not inherit the liabilities of the corporation which previously operated the business.

Steps in a Purchase and Sale

In general, the following are the main steps to both a purchase and sale of shares and purchase of assets:

  1. Purchase agreement: The parties' lawyers will draft and negotiate the terms of the share purchase agreement or asset purchase agreement. In order to streamline this process, parties will often first agree to a letter of intent, which sets out the parties' agreement with respect to the main business terms. The purchase agreement will deal with the purchase price, details of the shares or assets being purchased, due diligence, representations and warranties of the parties, indemnities and closing procedures.
  2. Due Diligence: During the due diligence stage, the purchaser and their professional advisors will review financial, tax and accounting records of the corporation whose shares or assets are to be purchased, review the corporation's minute book, conduct an inspection of the premises and any important assets, review key contracts and perform various searches, such as PPSA and bankruptcy searches.
  3. Closing: For the closing of the transaction, the parties' lawyers will prepare and review each parties' closing documentation and the purchase price for the shares or assets is paid. A closing agenda is typically exchanged to organize this process. This closing documentation will include items such as authorizing resolutions, statutory declarations and a statement calculating the purchase price due on closing. For a purchase of shares, corporate documentation related to the share transfer will be included. For a purchase of assets, the seller will provide the purchaser with a bill of sale.

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