Share sale or asset sale
The first question is usually structure. In a share sale, the buyer takes over the company itself, history included. In an asset sale, the buyer picks the equipment, contracts and goodwill it wants and leaves the company behind.
That choice generally affects tax, which liabilities move to the buyer, which contracts need the other party’s consent to transfer, and how employees move over. Your accountant should look at the tax side early.
How a deal usually runs
- Letter of intent. The key terms: price, structure, timing and conditions.
- Due diligence. A review of the company’s records, contracts, leases and liabilities.
- Purchase agreement. The full deal, including what each side promises and what happens if a promise turns out to be untrue.
- Closing. The documents that make the transfer official, and the payment.
A common mistake is signing a letter of intent before the key terms are settled.
Speak with a lawyer before you sign anything, even a document described as non-binding.
Selling? Plan ahead
Buyers look closely at corporate records, contracts and who owns what. Tidying the minute book and key agreements before you go to market makes a sale smoother, and it is also a good moment to update your estate plan.
Common questions
How long does a business sale take?
Small deals can close within a couple of months of a signed letter of intent; larger or more complex deals take longer. Due diligence and third-party consents usually set the pace.
Do I need a lawyer if I am using a business broker?
Yes. A broker finds the buyer or seller and helps with price; a lawyer protects you in the documents you sign.
This page is general information about Ontario law, not legal advice for your situation.