-If you choose a sale of shares, your Business is sold in its entirety by selling all issued shares. In a sale of shares, your Business entity, inclusive of all its assets, rights and obligations, would transfer from the Seller to the Purchaser. This includes all debts, accounts receivable, trade names, goodwill, etc.
-If you choose a sale of assets, your Business entity (corporation, partnership, etc.) remains with the Sellers and ONLY the assets described in the Agreement (equipment, buildings, client lists, etc) will be transferred to the Purchaser.
-If you select a sale of shares but are not selling all outstanding shares then you should use our Share Purchase Agreement.

Yes, there may be tax implications involved in selling assets vs selling shares. If you are uncertain which is the best option for you then check with your accountant.

Unincorporated business means a business which does not have a separate legal identity from that of its owner. The owner is fully liable for all debts and all actions of the business. Examples of unincorporated businesses include sole traders and partnerships.

Try to use a street address instead of a post office box. A street address is more accurate and descriptive and prevents any misunderstanding in the Agreement.

Try to use a street address instead of a post office box. A street address is more accurate and descriptive and prevents any misunderstanding in the Agreement.

Try to use a street address instead of a post office box. A street address is more accurate and descriptive and prevents any misunderstanding in the Agreement.

- Check the Sales Tax box beside each asset in respect of which tax is payable on this sale. You will be asked to confirm the tax rate later on and then the total including tax will be calculated.
- To learn more about GST and Purchase of Business Agreement click here.
Important: Avoid a nasty surprise later. If you are uncertain how to proceed with GST/HST, you may apply to the Canada Revenue Agency, at no cost, for a ruling specific to your situation. For more information on GST/HST rulings click here.

-In a sale of assets, the assets to be included in the purchase of your Business should be specified to ensure that there are no misunderstandings regarding what is to be included or not included in the sale.
-In addition, by allocating a portion of the selling price to each asset, there will be certainty as to how the Purchaser and Seller will file their taxes in regards to those assets. Both parties must adhere to your Agreement when filing taxes.

-Goodwill is the value of your good reputation in the marketplace. Goodwill may have considerable impact on the continued success of your Business after the transfer of ownership.
-An accurate monetary value representing goodwill may be difficult to determine. If the Seller wishes to include goodwill as part of the sale price then a qualified accountant should be used to find a fair value for goodwill. For tax purposes, you need to be able to justify the value you assign to goodwill.
-In some sectors where there are minimal tangible assets, the goodwill of the company can represent a significant portion of the purchase price.

-Books, records and files of your Business will include all the information required for a smooth transition in ownership and to continue normal operations after the closing date. This includes all accounting files of your Business and also includes marketing information such as client lists and market research information and all files related to product research and development as well as production and maintenance history.
-Note that a copy of accounts receivable up to the closing date may be retained by the Seller to facilitate collection of outstanding accounts.

Business contracts such as sales contracts related to the core activity of your Business would typically transfer to the Purchaser after closing. Business contracts such as partnerships in related ventures may or may not be included in the sale of your Business. Those partnership or venture contracts may prohibit the transfer of a partner's interest to an outside party. Keep in mind that other business contracts may require the written consent of third parties before those contracts can be transferred.

Trade-Marks would include all ownership rights to existing copyrights, trade-names and trademarks as well as all rights to all current research not yet trademarked. This will allow the Purchaser to carry on normal operations after the closing date.

Sales orders which have been confirmed, but were not shipped prior to the closing date, would require goods and inventory from the post-closing inventory. As a result revenues from these sales would typically go to the Purchaser and should not be included in the accounts receivable of the Seller.

Excluded assets will not be included in the sale. The final document will expressly state all the items that you indicate are not to be included.

HST (harmonized sales tax) is a consumption tax applicable in only a few provinces. The HST combines the federal goods and services tax (GST) and the provincial sales tax into a single sales tax.

For a person or entity to collect HST they must be registered and have an HST registration number.

For a person or entity to collect GST they must be registered and have a GST registration number.

GST may not be required depending on your circumstance. For example, GST may not be required where the Purchaser is acquiring 90% or more of the property necessary to continue carrying on the business. However a joint election must be made by the Seller and the Purchaser.

New tax rates are implemented regularly. Consult the statutes and regulations specific to your region.

Ownership in a Corporation can be divided among one or more classes of shares. For example Class A, Class B, or Class C. In addition, a class of shares may be issued in series, for example, Class B Shares, Series 8 or Class B Shares, Series 9.

The closing date is the date the parties pay the outstanding balance and transfer the Assets.

A promissory note is an enforceable promise to pay back a loan or debt on demand or at some future time. A promissory note is a separate document and is also available on this website.

A non-competition clause prevents the Seller from entering into a similar, competitive business prior to the expiration of the non-competition period. The courts may not enforce this clause if the period and region specified are too broad or unreasonable taking into consideration industry norms.

A non-solicitation clause prevents the Seller from soliciting or hiring former employees prior to the expiration of the non-solicitation period. The courts may not enforce this clause if the period of the non-solicitation is too long or unreasonable taking into consideration industry norms.

A confidentiality clause protects both the Purchaser and the Seller from the harmful release of any proprietary or confidential information that may have been revealed at any time during the negotiations for this Agreement.

Where applicable, the Seller should guarantee that no hazardous spill or emission has occurred for which the Purchaser could become liable and also guarantee that the Business is not in violation of any relevant environmental laws.

-Each party should provide the other with a written assurance that all representations and warranties have been addressed and are valid.
-Officer Certificate: An officer certificate is executed by a corporate officer or, in the case of a non-corporate business entity, by a member of the management team. An officer certificate is reasonable assurance of the accuracy of representations and warrants.
-Legal Opinion: A legal opinion is provided by an attorney acting as an independent third party. The attorney is obligated to provide an accurate well-researched assessment of the representations and warranties.

Representations and warranties are promises that one party makes to the other relating to a term of the Agreement or the state of their Business and that party will have a remedy for the breach or failure of that promise.

-A condition precedent is a term of your Agreement that must be met prior to the closing date. If conditions precedent are not met then your Agreement would be void.
-An example of a condition precedent might be that the Seller must obtain permission from a landlord to assign a commercial lease over to the Purchaser prior to the closing date.

- Standard conditions precedent to be performed by the Seller
-The following conditions precedent will be automatically included in your final document:

• All of the representations and warranties made by the Seller in this Agreement will be true and accurate in all material respects on the Closing Date.
• The Seller will obtain and complete any and all forms, documents, consents, approvals, registrations, declarations, orders, and authorizations from any person or governmental or public body that are required of the Seller for the proper execution of this Agreement and transfer of the Assets to the Purchaser.
• No substantial damage to or alteration of the Assets that would adversely affect their value will occur between the date this Agreement is signed and the Closing Date.

-Standard conditions precedent to be performed by the Purchaser
The following conditions precedent will be automatically included in your final document:

• All of the representations and warranties made by the Purchaser in this Agreement will be true and accurate in all material respects on the Closing Date.
• The Purchaser will obtain or complete all forms, documents, consents, approvals, registrations, declarations, orders, and authorizations from any person or any governmental or public body, required of the Purchaser in connection with the execution of this Agreement.The Seller will receive a legal opinion from the Purchaser's counsel confirming the representations and warranties given by the Purchaser in this Agreement.

-The Purchaser may assume some, all or none of the liabilities of the Seller. If any liabilities are to be assumed by the Purchaser then select 'Yes' and then describe in detail the liabilities to be assumed.
-If the Purchaser does assume the liabilities of the Seller, then the Purchaser will be legally responsible for paying these liabilities.

The assumed liabilities clause is applicable where the parties agree that the Purchaser will assume responsibility for some or all of the liabilities, debts or obligations of the Seller.

-Most documents and contracts do not require a witness for them to be legally valid. However, many banks and other institutions have their own policies about signing requirements, and may refuse to accept documents that are not witnessed, regardless of whether they are legally correct.
-Also, if there is a possibility of a misunderstanding or you want better evidence of the execution of the agreement for the purposes of litigation then you may want to get your document witnessed.

Ideally a witness should be an adult who does not have any interest in the document being signed and who is capable of understanding the witnessing process.