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Buying & Selling a Business

Am I on the hook for a human rights complaint filed against the seller before I bought in?

TSL Written by the Treadstone Law team· Updated August 2026

It depends on your deal structure. In a share purchase, generally yes — a human rights complaint against the corporation is a liability of that corporation, and since you now own it, responsibility for defending and potentially resolving the complaint continues along with everything else, unless the purchase agreement specifically addresses it through an indemnity or holdback tied to the outcome.

In an asset purchase, generally no — the complaint concerns conduct by the seller as employer at the relevant time, and a properly structured asset deal should leave that liability with the selling entity rather than shifting it to you as a separate legal employer that wasn't involved in the underlying events.

Because human rights proceedings can take time to resolve and aren't always fully reflected in a company's financial statements, this is worth specifically asking about during due diligence rather than assuming a clean search will catch it — ask the seller directly whether any complaints, investigations, or proceedings are pending, and get a representation and indemnity addressing this specifically. A Treadstone business lawyer can help assess exposure and structure appropriate protections for your specific deal.

Key takeaways

  • A share purchase generally carries an existing human rights complaint forward with the corporation.
  • A properly structured asset purchase can leave this liability with the selling employer.
  • These proceedings aren't always fully reflected in financial statements, so ask directly.
  • Get a specific representation and indemnity addressing pending human rights matters.
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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