What happens at closing when you buy a business in Alberta?
This answer covers the law of Alberta.
On closing day, you and the seller sign the final documents, the purchase funds are paid, and you receive the keys, accounts and records for the business. Most of the checking should be done before that day, so closing is mostly signing and handing over, as long as nothing has changed since your last checks.
Before closing, your lawyer can search the Personal Property Registry for registered interests against the seller, using a business debtor name search or, for vehicles and similar items, a serial number search. Corporate Registry searches can show the registration date, owners, directors and legal addresses. If you qualify for the going-concern exemption, the seller and buyer make a joint election on CRA form GST44, and a registrant buyer must file it with the Minister by the filing deadline for its first reporting period in which tax would otherwise have become payable.
If a CSBFP loan helps fund the purchase, the 2% registration fee can be financed, but lender fees such as set-up fees are charged separately. Exact documents and timing depend on your agreement, so confirm the list with your lawyer.
Key takeaways
- Most checking is done before closing day, which is mostly signing documents, paying the funds and receiving keys, accounts and records.
- Corporate Registry searches can show the registration date, owners, directors and legal addresses of a corporation.
- The GST44 election is made jointly by seller and buyer, and a registrant buyer must file it with the Minister.
- If you use a CSBFP loan, the 2% registration fee can be financed, but lender fees such as set-up fees cannot.