What happens to environmental liability if I structure the deal as a share purchase instead of assets?

In a share purchase, environmental liability tied to the corporation — contamination on land it owns or operates, or outstanding regulatory obligations — comes with the shares, because the same corporate entity remains responsible before and after the sale. It doesn't matter when the contamination happened or whether you knew about it; the corporation you now own is still the same legal person that owned or operated the property.

The nuance many buyers miss is that structuring the deal as an asset purchase instead doesn't automatically solve this. If you still choose to acquire the contaminated real property as one of the purchased assets, environmental regulators can generally look to the current owner or operator of land, regardless of how the purchase agreement allocates responsibility between buyer and seller privately. The purchase structure affects your rights against the seller; it doesn't necessarily change a regulator's ability to hold the property's current owner responsible.

Environmental due diligence — a proper site assessment before closing — matters in both structures, and a business lawyer can help build specific representations, indemnities, and holdbacks addressing environmental risk into whichever structure you choose.