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The purchase and sale of a business can be full of complex legal and tax issues, many of which may require the assistance of a lawyer and may not be readily apparent to the parties to the transaction. Unintended legal and/or tax consequences can result if the purchase and sale agreement is not drafted properly to address the relevant issues.

A few of the main considerations arising in respect of a purchase and sale that often require legal and/or tax advice include:

  1. Choosing between an Asset and a Share Sale (or potentially a “hybrid” asset and share sale);
  2. Determining the most suitable Ownership Structure for the Purchaser (e.g., corporation, individual, partnership, trust, etc.);
  3. Payment of the Purchase Price (e.g., will the Seller be providing vendor financing or does the Buyer have traditional bank financing);
  4. Assuring Confidentiality throughout the Transaction;
  5. Employment/Contractor Agreements for the exiting Owner;
  6. Non-Competition and Non-Solicitation Agreements;
  7. Third Party approvals and assignments (e.g. existing contracts, leases);
  8. Tax Issues (e.g., income tax consequences and applicability of GST/PST); and
  9. Representations and Warranties made by the Buyer and the Seller as well as Indemnities for breach of Representations and Warranties.

The above considerations are only a few of the issues to be considered in buying or selling a business.  Depending on the nature of the business, other factors to consider may include whether or not special licenses, permits or regulatory approvals are required, restrictions on some professional businesses imposed by law, and how to deal with outstanding liabilities of the business being purchased.  Both the seller and the buyer may also want to consider whether they are adequately protected on employment, environmental and intellectual property matters.

McKercher LLP provides regular advice on corporate law, tax law, corporate finance law, employment law, and other areas of law related to the purchase and sale of businesses as well as business succession planning. We have acted for numerous small, medium, and large-sized businesses throughout their corporate life cycle. To get more information about us, please check out our website ( or get into contact with Joe Gill (306-664-1276 or

This document is intended to provide readers with general information about certain aspects of the law relating to the purchase and sale of a business.  It is not a definitive analysis of the law, nor is it a substitute for legal advice.