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Buying & Selling a Business

Can I be found to be a 'related employer' under labour law just by buying part of a business?

TSL Written by the Treadstone Law team· Updated August 2026

It's possible in some circumstances, though this is a fact-specific finding rather than an automatic consequence of buying part of a business. Ontario employment and labour law includes concepts designed to prevent employers from using multiple related corporations, or fragmented business structures, to avoid obligations that would otherwise apply if the business were operated as a single entity — treating genuinely intertwined operations as effectively one employer for certain purposes, even where they're technically separate corporations.

Whether this applies to you depends on things like how independently the part of the business you bought actually operates, whether there's shared control, management, or ongoing operational integration with the seller or other related entities, and the reasons behind how the businesses are structured. Simply buying part of a business through an arm's-length transaction and operating it independently afterward is generally not, by itself, enough to trigger this kind of finding.

If your acquisition involves any ongoing relationship, shared management, or continuing operational ties with the seller or other related businesses, get this assessed specifically rather than assuming a partial purchase is automatically treated as fully separate. A Treadstone business lawyer can help evaluate your specific structure.

Key takeaways

  • Related-employer findings are fact-specific, not an automatic result of buying part of a business.
  • These rules target genuinely intertwined operations, shared control, or fragmented structures.
  • An independent, arm's-length purchase generally isn't enough on its own to trigger this finding.
  • Get your specific structure assessed if any ongoing ties to the seller or related entities remain.
This is general information, not legal advice. It doesn’t create a lawyer–client relationship, and the rules can change. For advice on your situation, a Treadstone business lawyer can help.
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