Can I avoid needing landlord consent by amalgamating instead of formally assigning the lease?
Sometimes, but this is exactly the kind of structuring move that many modern commercial leases are drafted to catch. Under the Business Corporations Act and its federal counterpart, an amalgamated corporation continues as one corporation, generally succeeding to the rights and obligations of the amalgamating corporations by operation of law — which can mean there's no assignment in the traditional sense, since the tenant corporation continues to exist, just merged with another.
The problem is that many commercial leases now define "assignment" broadly enough to specifically capture amalgamation, corporate reorganization, or a change of control — precisely because landlords and their lawyers became aware of this potential loophole. Where your lease has language like this, amalgamating instead of formally assigning won't avoid the consent requirement at all; it may simply trigger it under a different label.
Whether this route actually helps you depends entirely on your specific lease's definition of assignment, so this isn't a shortcut to attempt without reviewing that wording first. A Treadstone business lawyer can check whether your lease closes this door before you rely on amalgamating as a workaround.
Key takeaways
- An amalgamated corporation continues as one entity, which can avoid a traditional assignment.
- Many modern leases define assignment broadly enough to specifically capture amalgamation.
- Whether this route helps you depends entirely on your specific lease's own definitions.
- Review the lease's assignment definition before relying on amalgamation as a workaround.