Can a seller open a competing business under their spouse's name without breaching a non-compete?

Usually not, if the non-compete is drafted the way most are. Ontario purchase agreements typically restrict the seller from competing "directly or indirectly, alone or in conjunction with any other person," language deliberately chosen to catch exactly this kind of arrangement. Courts asked to enforce a restrictive covenant tend to look past the formal name on the business registration to whether the seller is, in substance, still running, financing, working in, or benefiting from the competing operation — putting a spouse's name on the paperwork does not usually change that underlying reality.

That said, the outcome still turns on the specific wording of the clause the seller actually signed. A narrowly drafted covenant that only prohibits the seller personally "carrying on" a competing business, without broader indirect-involvement language, leaves more room for this kind of argument than a broadly worded one does. A seller weighing this kind of arrangement, or a buyer worried about it happening, should have the actual restrictive covenant reviewed by a Treadstone business lawyer rather than relying on the name on the door.