Does it matter if the seller's corporation isn't in good standing when I do diligence?

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 of good standing for reasons like missed annual filings or unpaid corporate fees, and a certificate of status (or corporate profile report) from the Ontario Business Registry is the standard way to confirm current standing before you go further with a deal.

If the corporation isn't in good standing, it doesn't automatically mean the business itself is in trouble — it's often just administrative neglect that can be fixed by filing what's overdue. But it should raise a broader question about how carefully the corporation has been maintained generally, and it can complicate closing mechanics, since some transactions and financing arrangements require a current certificate of status as a condition.

If you're doing a share sale specifically, confirming good standing matters even more, since you're acquiring the corporation itself, including whatever administrative gaps come with it. Ask the seller to bring the corporation back into good standing before or at closing, and confirm it with a fresh certificate. A Treadstone business lawyer can obtain and review this for you.