Does a buyer in Alberta need consent from landlords, customers or suppliers to take over a business?
This answer covers the law of Alberta.
It depends on what the contracts say and how the deal is structured, so the answer is not always yes. The wording of each lease, customer agreement and supplier agreement decides whether anyone's consent is needed, and that can differ between an asset purchase and a share purchase. Because this turns on the exact terms of each contract, how it applies to your deal is worth confirming with a lawyer before you commit.
Read each key contract for assignment and change of control wording before you sign. Then list the consents you need and make them a condition of closing in the purchase agreement, so you are not bound to complete if a landlord or key supplier refuses. Where the deal is an asset sale, the tax side also matters: the GST business-assets rule looks at whether you get all or substantially all of the property that can reasonably be regarded as necessary to carry on the business.
Even with a valid GST election, tax is still payable on a taxable lease, licence or similar supply of property. A lawyer can review the lease and contracts and tell you which consents your particular deal needs.
Key takeaways
- Whether you need consent depends on the wording of each lease and contract and on whether you buy assets or shares.
- How each contract is handled in an asset purchase or a share purchase depends on its exact terms, so it is worth confirming with a lawyer.
- Make the consents you need a condition of closing in the purchase agreement so you are not forced to complete without them.
- Even with a valid GST election, tax is still payable on a taxable lease, licence or similar supply of property.