What does a share purchase agreement in Ontario need to include?

A share purchase agreement usually sets out the price and how it is paid, the conditions that must be met before closing, the seller's statements about the corporation (representations and warranties), and each side's promises before and after closing (covenants). Protections such as indemnity limits and holdbacks are mostly set by the contract, so they depend on what you negotiate.

Buying shares means the corporation stays the same legal entity, which shapes what the agreement needs to address. Buying shares is generally not subject to GST/HST. Employees' accrued service is unaffected, although a later wind-up or amalgamation can change that. The WSIB purchase-certificate policy does not apply to share purchases where no assets are disposed of, because these buyers take on the seller's liabilities by law.

If a non-resident sells unlisted shares that, at any time in the previous 60 months, drew over 50% of their value from Canadian real, resource or timber property, the buyer can owe 25% of cost above the certificate limit without a certificate of compliance. The buyer is not liable if, after reasonable inquiry, it had no reason to believe the seller was non-resident. Payments for a non-compete are generally income, with exceptions such as amounts already taxed as employment income or covered by an election.