1000 plain-language Q&As about Ontario business purchase and sale. Browse below, or search the whole library.
Generally yes, especially if you haven't signed a binding agreement yet. Early conversations, marketing the business, or even a signed letter of intent…
Read the full answer →Yes — telling people you're exploring a sale doesn't create any obligation to follow through, and changing your mind afterward is legally…
Read the full answer →Often yes, but how much room you have depends on how far the wind-down has actually progressed. If you've begun winding down but haven't yet terminated…
Read the full answer →Possibly, and this is worth checking carefully rather than assuming it doesn't apply just because you're not doing a full sale. Many franchise…
Read the full answer →Generally, yes, HST applies to most sales of business assets, but Ontario business sales structured as a going concern have a specific way around it.…
Read the full answer →It depends on the regulator and whether the investigation became public. Some regulatory proceedings, particularly ones that resulted in a public…
Read the full answer →Yes, and reviewing material contracts for automatic renewal (and related notice-period) clauses is a standard part of proper contract due diligence,…
Read the full answer →Yes, and it's a quick, worthwhile check. Domain name registration information is generally available through a public WHOIS lookup or the specific…
Read the full answer →Yes, and this is a standard part of due diligence for any trades business where equipment is central to the operation. A buyer can and generally should…
Read the full answer →There's no requirement that a child pay full fair value up front. Parents commonly address this with vendor take-back financing — payments over time…
Read the full answer →No, and treating it as an immediate either-or choice is usually the wrong way to approach it. You can explore both paths in parallel — having honest…
Read the full answer →Signing off on the closing financials — accepting the final statement of adjustments or closing balance sheet — generally forecloses disputing the…
Read the full answer →Yes — a seller relocating to another province doesn't defeat a valid claim connected to an Ontario business sale. Ontario courts can generally still…
Read the full answer →Generally yes — a valid claim against a seller, whether for an indemnity obligation, an outstanding vendor take-back debt, or a judgment, doesn't…
Read the full answer →It depends entirely on whether the purchase agreement makes the escrow the buyer's exclusive remedy up to its available amount, since that is a…
Read the full answer →Sometimes, but indirect or consequential losses — like a separate deal you lost because of the seller's problem — are generally harder to recover than…
Read the full answer →Potentially, yes. When depreciable property is sold for less than its remaining undepreciated tax value, and that sale leaves no other assets remaining…
Read the full answer →Yes, this happens more often than people expect. A required signature — a spousal consent, a specific corporate officer, a landlord's consent to a…
Read the full answer →Yes, there is a real legal distinction, even though the two terms are sometimes used loosely in everyday conversation. A co-signer, sometimes called a…
Read the full answer →A co-tenancy clause — which typically gives a tenant reduced rent or an exit right if a specified anchor tenant, or a minimum level of occupancy in the…
Read the full answer →Most Ontario professionals — physicians, dentists, lawyers, accountants, and others — can't simply sell a practice the way any other business owner…
Read the full answer →Both, generally, though the emphasis differs by college. Most Ontario regulatory colleges care very much about who ends up owning or controlling a…
Read the full answer →This isn't a uniform rule across Ontario's regulatory colleges — some processes involve review periods or notice requirements that function somewhat…
Read the full answer →Yes — where one particular liability is well-defined and significant enough, it's common to address it through its own separate agreement alongside the…
Read the full answer →Yes, a deal can include both, and it is common for them to run side by side because they serve genuinely different purposes rather than competing for…
Read the full answer →This is difficult, and there's no guaranteed remedy just because a deal ultimately went nowhere and you feel it was never sincere. Since the core terms…
Read the full answer →Reasonably, yes. Relationships built on trust and history rather than signed agreements are common in many Ontario small businesses, and they aren't…
Read the full answer →It can, even though the contamination itself sits on land you have nothing to do with. Contamination doesn't respect property lines, and groundwater or…
Read the full answer →This depends on whether your specific resale actually triggers a fresh disclosure obligation, and it's not something to assume either way without…
Read the full answer →In a share sale, the buyer is acquiring the corporation itself, including its complete corporate history, so the minute book (and corporate seal, where…
Read the full answer →Often, yes, depending on how you want the money paid out. If part of the payout represents the non-taxable portion of a capital gain your corporation…
Read the full answer →It can, but only if the order actually says so, and only to the extent it says so. The specific protection buyers seek is a vesting order — a court…
Read the full answer →Yes — a court judgment is against the seller personally, or the seller's corporation, for the money owed, and the fact that the specific business that…
Read the full answer →If the CRA doesn't accept that an amount allocated to a non-compete or other restrictive covenant reflects genuine value for a real restriction, it can…
Read the full answer →Yes. A purchase price allocation isn't locked in simply because both sides agreed to it and the deal closed; it's reflected in tax returns, and the CRA…
Read the full answer →An allocation agreed between a buyer and seller in the purchase agreement is a strong starting point, but it isn't automatically binding on the CRA.…
Read the full answer →Yes, an earn-out adds real complexity on top of what a straightforward cross-border sale already involves, precisely because the payment is contingent…
Read the full answer →Possibly, but this depends on how the specific acquisition is structured and what the program's current rules actually cover. The Canada Small Business…
Read the full answer →Customer data doesn't just transfer as a generic asset; the privacy obligations attached to it transfer along with it, and in some cases those…
Read the full answer →Deposits and gift-card balances taken by the seller before the sale are generally the seller's, or the insolvent estate's, obligation, not something a…
Read the full answer →Yes, if the party the condition was meant to protect agrees to waive it or accept an undertaking that it will be satisfied shortly. Most conditions in…
Read the full answer →Not automatically. Whether you can withhold or reduce vendor take-back payments to offset a separate damages or indemnity claim against the seller…
Read the full answer →To a limited extent, yes. Where a sale involves proceeds actually being received over time — commonly through a vendor take-back arrangement — Canadian…
Read the full answer →Yes, and this is a sensible, common protective step to ask for. If a deposit has been agreed to as part of your LOI, there's no rule requiring it to…
Read the full answer →A dental practice sale can close while some patients have treatment plans in progress, but the selling dentist's professional obligations toward those…
Read the full answer →Generally, yes. If the seller is the one who breaches the purchase agreement by backing out without a valid legal basis, the buyer is typically…
Read the full answer →This turns entirely on why the deposit was released and what actually happened afterward. If the purchase agreement itself allowed early release once a…
Read the full answer →Yes — structuring a deposit so it starts refundable and becomes non-refundable only once specific conditions are satisfied, such as the expiry of a due…
Read the full answer →They serve different jobs in the same agreement. A condition precedent is a state of affairs that must exist before a party is obligated to close at…
Read the full answer →Yes, and confusing the two is a common source of misunderstanding when reading an LOI. A deposit is typically money put forward early, usually as a…
Read the full answer →Yes, and treating every inquiry the same way — either overly guarded with everyone or overly generous with everyone — tends to work against you. A…
Read the full answer →Planning an exit is deciding on a direction and starting to prepare for it; being ready to execute is having the business, your finances, and your…
Read the full answer →A trustee administers a formal bankruptcy under the federal Bankruptcy and Insolvency Act — bankruptcy is exclusively a federal matter, and Ontario has…
Read the full answer →It can, but generally in the employee's favour more than yours, at least at the outset. Just cause for termination is a high legal bar, and it's…
Read the full answer →You can, but it shifts the risk onto you in a way that's easy to avoid simply by sequencing things differently. Once specific financial numbers are…
Read the full answer →It can, if you haven't been properly released from the lease before dissolving the corporation that was the tenant. Where the corporation remains…
Read the full answer →Not automatically — there's no general legal rule entitling you to extra pay simply for continuing to show up and do your job during a business sale,…
Read the full answer →Unlike a residential real estate deposit, there's no standard or default rule governing deposits in a business purchase and sale — whether you get it…
Read the full answer →Yes, in the sense that banked overtime you've genuinely earned doesn't just disappear because the business changed hands — it's compensation you're…
Read the full answer →Not really, as a strict legal right — the decision to sell a business, and the reasons behind it, generally belong to the owner, and employees don't…
Read the full answer →You always have a say in the sense that no one can force you, personally, to keep working somewhere against your will — you can resign at any point,…
Read the full answer →No, not simply because the business was sold — using your own personal email for work was a choice, often one of convenience, rather than a legal…
Read the full answer →It depends on what's being asked for and why, rather than a flat yes or no. A new owner stepping into the role of employer has a legitimate need for…
Read the full answer →Not because the business changed hands — but the answer depends on which kind of sale happened. If the new owner bought shares in your employer, your…
Read the full answer →Not from scratch, but a short conversation is still a good idea. When your employment continues with a new owner, the accommodation you already have in…
Read the full answer →No, not automatically. If the new owner has bought the shares of your employer, your employer is legally the same company as before — nothing about…
Read the full answer →In most cases, yes — training or knowledge transfer during a transition is a reasonable part of your job, and refusing outright can create real risk…
Read the full answer →Yes, automatically, and this isn't really an open question the way it can be in an asset deal. In a share purchase, the corporation itself doesn't…
Read the full answer →Yes. This is one of the clearest protections built into Ontario's continuity-of-employment rule. Under the Employment Standards Act, 2000, when a…
Read the full answer →A new owner generally can change job titles, and on its own a title change usually isn't a legal problem — what matters far more is whether your actual…
Read the full answer →Your underlying length of service doesn't legally reset just because the business was sold and you kept working — Ontario law treats your employment as…
Read the full answer →Yes, in the sense that matters most. Under the Employment Standards Act, 2000, when a business is sold and the new owner keeps you on, your employment…
Read the full answer →It depends on why your employment is actually ending, not simply on your personal preference not to work for the new owner. If the new owner offers you…
Read the full answer →Yes — protection against being punished for raising legitimate concerns doesn't expire just because the business you raised them at was later sold, and…
Read the full answer →What you sign depends heavily on whether the deal is a share sale or an asset sale, since a Share Purchase Agreement (SPA) and an Asset Purchase…
Read the full answer →This depends on two separate things: statutory continuity of service, and the actual terms of whatever benefits plan you put in place, which aren't…
Read the full answer →No, generally not — outside of specific commitments in a signed agreement, such as a letter of intent's own terms, a buyer is typically free to walk…
Read the full answer →Generally, no meaningful fiduciary duty — a broker representing the buyer owes their loyalty and duty of full disclosure to the buyer, not to you, and…
Read the full answer →Yes, this can happen, and it surprises buyers who assume that because they never sat at the bargaining table, an existing collective agreement's…
Read the full answer →No, not if the condition is drafted properly — a financing condition is meant to protect a buyer against financing genuinely falling through, not to…
Read the full answer →Yes, timing matters directly here. Under the Employment Standards Act's continuity rule, an employee's service generally continues to count with you…
Read the full answer →Generally, no — a vague, general reference doesn't protect a seller against a specific claim the way a clear, particular disclosure does, and this…
Read the full answer →Using a holding company on top of your purchasing corporation is mainly a tax and governance choice, not a way to change the liability rules of the…
Read the full answer →No, though it does change what the representation actually protects against, and understanding that difference matters more than assuming a materiality…
Read the full answer →Yes, often more than the individual items warrant. Add-backs — expenses run through the business that a buyer wouldn't need to continue, like a…
Read the full answer →Not directly — what protects you from a seller's hidden debts is choosing an asset purchase over a share purchase, not which entity you use to make it.…
Read the full answer →No — a numbered company is simply an ordinary Ontario corporation that was never given a chosen business name, and it's governed by exactly the same…
Read the full answer →Yes, generally, regardless of how confident you are in the outcome, because a buyer is being asked to take on uncertainty they didn't create and can't…
Read the full answer →It can genuinely go either way, and the difference comes down to whether the spike is explainable and sustainable. A profit increase driven by real,…
Read the full answer →Often, yes, but it isn't purely a contract question you can control through your purchase agreement wording. Ontario labour relations law includes…
Read the full answer →Neither approach is automatically wrong, but each carries a real trade-off, and thoughtful drafting usually lands somewhere in between rather than at…
Read the full answer →Partly, but not as completely as many buyers assume. An asset purchase does let you avoid taking on specific severance debts that were already owed…
Read the full answer →Not automatically, and this is a distinction worth being precise about. A probationary period is generally a contractual and workplace-policy concept…
Read the full answer →Yes — it changes what you actually need to decide you're buying. If the seller's operating business sits inside a subsidiary owned by a holding…
Read the full answer →Only if it says so. Some LOIs include an explicit expiry or sunset date, after which the document lapses automatically if a definitive agreement hasn't…
Read the full answer →Not necessarily, and assuming it does is a common mistake buyers make. Existing insurance policies are written around the current insured — the selling…
Read the full answer →Not directly, though it can shift the dynamics of the negotiation in your favour in other ways. A buyer's financing difficulty generally isn't a reason…
Read the full answer →It can genuinely go either way, and it's worth being cautious about assuming it favours you. An inexperienced buyer may accept your explanations more…
Read the full answer →Not to the corporation's own liabilities — the company owes what it owes regardless of how its shares are divided, and buying 100% versus, say, 80%…
Read the full answer →It depends on how the business is bought. In a share purchase, nothing changes about the WSIB account or claims history, because the same corporation…
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