1000 plain-language Q&As about Ontario business purchase and sale. Browse below, or search the whole library.
Generally yes, if the lease's consent provision gives the landlord room to set conditions on approving a new tenant. A landlord's willingness to…
Read the full answer →Generally yes, and this is one of the most standard and defensible parts of a landlord's consent review. Landlords have a legitimate interest in…
Read the full answer →Generally yes, if your lease's consent provision gives the landlord room to set conditions on approving a new tenant, and this is a fairly common…
Read the full answer →Generally yes, if your lease's consent provision gives the landlord room to set reasonable conditions on approving a new tenant, and insurance…
Read the full answer →A landlord can propose it, but generally cannot force it unless your lease itself gives the landlord that kind of leverage — for example, a clause…
Read the full answer →Generally, this goes beyond what a landlord's consent power is meant to cover, though whether it's actually enforceable depends on your lease's…
Read the full answer →It depends on your lease's specific wording, since there is no general Ontario rule forcing a landlord to justify a refusal outside of what the lease…
Read the full answer →Silence creates real risk for your closing timeline, and how it's treated depends on your lease's own wording rather than any automatic rule that…
Read the full answer →It depends on what your lease actually authorizes the landlord to require as a condition of consent. Some leases give the landlord fairly broad…
Read the full answer →Only if your lease gives the landlord a recapture right, and only in the way that clause actually describes triggering it — merely hearing informally…
Read the full answer →Generally, no — not where your lease includes a standard that consent cannot be unreasonably withheld. A landlord's own preference to re-lease the…
Read the full answer →Yes, generally this is a legitimate reason for a landlord to refuse or condition consent. If another tenant in the same plaza or building has an…
Read the full answer →Often yes, and this is usually one of the stronger grounds a landlord has. Most commercial leases specify a "permitted use" clause restricting what…
Read the full answer →Not usually, but it depends entirely on what your lease says. Most commercial leases prohibit assigning the lease to a new tenant without the…
Read the full answer →Yes, generally a landlord can refuse to release you, and this is one of the least understood parts of assigning a commercial lease. Consenting to the…
Read the full answer →Only if that right was actually negotiated into your lease — it's not a standard or implied feature of Ontario commercial leases, and most leases say…
Read the full answer →This is generally one of the more defensible grounds a landlord can rely on. A tenant's "covenant" — their financial strength and ability to pay rent…
Read the full answer →Only if your lease actually gives the landlord that right. Some commercial leases include a "recapture" clause, allowing the landlord to terminate the…
Read the full answer →Don't close on the strength of a verbal approval alone. Most commercial leases require consent to assignment to be given in a particular form, and even…
Read the full answer →Whether the landlord can actually insist on this comes down to your lease's consent clause, and this is a more aggressive version of a common tactic.…
Read the full answer →On a straightforward assignment, the buyer generally steps into your existing lease as-is — including your current rent — and a landlord cannot simply…
Read the full answer →This can add a real extra layer to your timeline, and it happens more often than tenants expect. Where the landlord's own mortgage on the property…
Read the full answer →"Safe income" is the pool of a corporation's already-taxed retained earnings that can reasonably be said to contribute to the value of its shares, and…
Read the full answer →Client trust funds don't simply become part of the deal the way office equipment or a client list might. Money a law practice holds in trust belongs to…
Read the full answer →Not to begin thinking about it — you can start considering timing, talking to your accountant, and forming a general picture without a lawyer involved…
Read the full answer →Yes, and in most situations a lawyer is expected to. A lawyer holding client funds in trust is generally required to follow the closing conditions that…
Read the full answer →For a lawyer, generally no. A sale between parent and child creates the same kind of conflict of interest as a sale between two strangers, since the…
Read the full answer →An expired lease you're still operating under generally puts you in a holdover position, where you continue paying rent and the landlord continues…
Read the full answer →This timing overlap needs careful handling, because renewal and assignment are two separate steps that can interact in ways that catch sellers off…
Read the full answer →A lease that is genuinely silent on assignment is unusual, but where it happens, general principles of Ontario commercial tenancy law still apply.…
Read the full answer →Leasehold improvements — fixtures and alterations attached to the leased premises — generally belong to the landlord as part of the real property once…
Read the full answer →Yes, materially. In a share purchase, the buyer's corporation acquires the target corporation along with all of its existing liabilities, known and…
Read the full answer →Yes, and this is standard rather than unusual. Most commercial loan agreements include ongoing financial reporting covenants that continue for the…
Read the full answer →Typically both, depending on the security package the lender negotiates as part of approving the loan. Most commercial lenders financing a business…
Read the full answer →Yes, and this is a fairly common condition for lenders financing the purchase of an owner-operated business. A lender may see the departing owner's…
Read the full answer →Often yes, and this comes down to how conditional the specific commitment letter actually is, rather than any general rule that a signed commitment…
Read the full answer →It depends on your deal structure, though there's an added practical wrinkle here compared to some other pre-closing liabilities. In a share purchase,…
Read the full answer →It depends on your deal structure. In a share purchase, generally yes — liability connected to a workplace safety violation, including any fines,…
Read the full answer →Generally, no — confirming something true about your own business, even inadvertently, isn't itself a legal wrong, since you're not disclosing anyone…
Read the full answer →Yes, potentially — and this is a direct consequence of the general rule that assigning a lease doesn't automatically release the original tenant. If…
Read the full answer →Generally not, unless your LOI specifically included a cost-allocation or reimbursement clause addressing exactly this situation. Cost allocation is…
Read the full answer →Yes, this is a real risk, and it catches new owners off guard because they think of themselves as starting fresh rather than as continuing an existing…
Read the full answer →Yes, potentially. If you continue employing a group of the seller's employees as part of a going-concern purchase and then decide to terminate a…
Read the full answer →Generally, no, not personally — professional negligence liability attaches to the professional who actually provided the care or advice, not…
Read the full answer →Again, this turns largely on deal structure. In a share sale, the buyer acquires the corporation itself, including its legal history, so liability…
Read the full answer →Potentially, yes, even though nobody was formally let go. If a significant change to an employee's job title comes with a real reduction in duties,…
Read the full answer →If the deal is structured as an asset purchase, generally no — a termination that happened before closing, and any severance it triggered, is a…
Read the full answer →It depends heavily on whether you're buying shares or assets. In a share sale, you're acquiring the corporation itself, including its history, so any…
Read the full answer →It depends on your deal structure. In a share purchase, yes — unpaid overtime is a debt the corporation owes its employees, and since the corporation…
Read the full answer →Generally, whether you have any ongoing exposure after closing depends entirely on how your purchase agreement allocates this risk, not on some…
Read the full answer →Yes, this matters quite a bit, because under the Employment Standards Act, it's the actual substance of the working relationship — not the label the…
Read the full answer →It depends on your deal structure. In a share purchase, generally yes — a misclassification that led to unpaid overtime is, in substance, an unpaid…
Read the full answer →In a properly structured asset purchase, generally no — a termination carried out by the seller before closing, however it was timed, is legally the…
Read the full answer →Some licences and permits are simply not transferable under any circumstances — they're issued to a specific licensed individual or entity based on…
Read the full answer →Whether this supports a claim depends heavily on what the seller represented about the licence and whether its transferability was addressed as a…
Read the full answer →Some licences are issued specifically to an individual based on personal qualifications, certification, or a background check — a professional…
Read the full answer →This mismatch between a regulator's own application timeline and your deal's uncertainty is a genuine practical problem, since licensing bodies…
Read the full answer →This creates real complications, since most licensing applications and transfer processes are built around a living applicant or licensee actively…
Read the full answer →In most cases, a business licence or permit does not automatically transfer with a business purchase and sale — the buyer generally has to apply for…
Read the full answer →Yes, licensing is a real alternative to buying, though it's a fundamentally different kind of transaction. Rather than acquiring ownership of the…
Read the full answer →A change in ownership isn't itself a violation that triggers suspension, but mishandling the transition can absolutely create a gap in lawful service,…
Read the full answer →A liquor licence does not automatically follow the business when a bar is sold. In Ontario, a liquor licence is issued personally to the licensee (an…
Read the full answer →It depends on your listing agreement's wording and exactly why the deal fell apart. Some agreements tie commission to an actual closing, meaning no…
Read the full answer →Yes, this is a real and common way otherwise-qualifying shares can lose access to the exemption. Qualification depends on the corporation's assets…
Read the full answer →What happens depends heavily on how far "halfway through" actually is. Early on, before a letter of intent or with only informal discussions underway,…
Read the full answer →In a share purchase, the target corporation continues to exist, so its accumulated losses stay with it in principle, but buying control of a…
Read the full answer →Not properly, no. A sale of all or substantially all of a corporation's assets outside the ordinary course of business generally requires shareholder…
Read the full answer →Malpractice insurance is personal to the professional, not something that automatically transfers with the practice the way office equipment does. Most…
Read the full answer →Yes, open insurance claims are worth tracking down specifically before closing rather than assuming they'll simply resolve themselves in the…
Read the full answer →It matters for how much weight you can put on the numbers as handed to you, though it doesn't mean the business is misrepresented. Financial statements…
Read the full answer →Yes, an unusually high claims history is worth understanding rather than glossing over, for a few distinct reasons. It can affect your own ability to…
Read the full answer →Yes, this is worth understanding before you commit, particularly if you'll need the landlord's cooperation to assign or renew the lease. Under the…
Read the full answer →Yes, it matters, and it's worth checking early rather than assuming a business that's been operating for years must be fine. A corporation can fall out…
Read the full answer →Yes, and it's an easy detail to miss if you're focused on the business's financial statements rather than reading through what "its" equipment actually…
Read the full answer →Generally, no — a buyer, as the physician who will actually be providing care, retains their own professional judgment about which patients they take…
Read the full answer →After, in essentially every typical acquisition financing structure. Mezzanine financing is deliberately positioned between senior bank debt and the…
Read the full answer →A minority shareholder generally has a right to enough information about a proposed transaction to make an informed decision on how to vote, and where…
Read the full answer →It depends on how the sale is structured and what the minority shareholder is actually selling. Where all shareholders are selling their shares…
Read the full answer →Inheriting shares generally makes someone a shareholder with the same rights as anyone else who holds shares of that class — notice of meetings, voting…
Read the full answer →Shareholders generally have a right to receive relevant financial information before being asked to vote on a major transaction, and asking a minority…
Read the full answer →In terms of what you personally owe, no — as a minority shareholder, your personal liability is generally limited to what you paid for your shares, and…
Read the full answer →Generally, no. Most significant corporate decisions, including a sale of all or substantially all of the corporation's assets outside the ordinary…
Read the full answer →A minority shareholder generally can't unilaterally require the corporation to commission a valuation just because they ask for one, but nothing stops…
Read the full answer →It depends on the mechanism being used. Where a shareholders' agreement includes drag-along rights, a majority reaching an agreed threshold can…
Read the full answer →It depends on what's actually being sold and how the transaction is structured. If the sale is of the corporation's assets rather than its shares, a…
Read the full answer →Minority shareholders generally have statutory rights to proper notice of shareholder meetings, to receive relevant financial information, and to vote…
Read the full answer →Not necessarily as a matter of general rule. Ontario corporate law doesn't automatically require every shareholder to receive an identical price per…
Read the full answer →Yes — this is precisely what Ontario's oppression remedy under the Business Corporations Act is designed for. It allows a shareholder, including a…
Read the full answer →A corporation can generally issue new shares, and doing so can dilute existing shareholders' proportional ownership, but where dilution is used…
Read the full answer →A minority shareholder generally can't force the company or the other shareholders to buy them out, or force a sale of the whole business, just because…
Read the full answer →Potentially, yes, and this connects two separate risks that compound each other. If someone genuinely functioning as an employee has been misclassified…
Read the full answer →Not necessarily a mistake, but it does mean going in with realistic expectations, since buyers typically look at more than one year of financial…
Read the full answer →There is no default answer to this — it depends entirely on how the purchase transaction and the resulting agreement are structured. If several…
Read the full answer →In principle, yes — if multiple family members each genuinely hold qualifying shares in their own right, whether directly, through their own holding…
Read the full answer →Each licence and its issuing body operates independently, so approval from one regulator has no bearing on how another handles its own review — a…
Read the full answer →It depends entirely on whether the purchase agreement makes the sellers "joint and several" for indemnity purposes, since there is no automatic default…
Read the full answer →Generally yes, if the indemnity cap is drafted as an aggregate ceiling, which is the common approach in Ontario purchase agreements. An aggregate cap…
Read the full answer →Each licence is issued by a different level of government with its own separate process, so there's no reason to expect a municipal business licence…
Read the full answer →Yes, this is a realistic risk, and it's a good example of why licence status needs to be checked carefully before closing rather than assumed to be in…
Read the full answer →Yes, this is common, and it depends entirely on how the specific municipal licensing regime is set up rather than any single Ontario-wide rule. Some…
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