- In a share sale, the buyer purchases the shares of the corporation that owns the business — the corporation keeps operating under its own name, with its own contracts, largely undisturbed.
- If your business operates from leased premises, the lease is usually the single most important contract to sort out early — a buyer who can’t be confident of the space often won’t…
Not every contract in your business simply "comes along" when you sell it. Whether a customer contract, a supplier agreement, or a commercial lease survives the sale — and on what terms — depends on how the deal is structured and on the fine print of each individual document. Getting a clear picture of your assignable contracts before you’re deep in a live deal avoids a scramble at closing, and sometimes avoids losing a contract altogether.
The starting point is always the same question: are you selling assets or shares? In a share sale, the corporation itself doesn’t change — it keeps its own name and its own contracts, so most agreements continue without any formal assignment. In an asset sale, the buyer is acquiring specific assets, often including the benefit of specific contracts, and each one has to be individually assigned or replaced — which means every consent, notice, and change-of-control clause in it actually matters.
This article walks through the categories of contracts sellers most often trip over, and how to build a realistic timeline for getting them sorted before closing.
Share Sale vs. Asset Sale: Why It Changes Everything
In a share sale, the buyer purchases the shares of the corporation that owns the business — the corporation keeps operating under its own name, with its own contracts, largely undisturbed. Most contracts continue automatically unless they contain an express change-of-control clause requiring notice or consent when share ownership changes.
In an asset sale, the buyer and seller identify which specific assets — and which specific contracts — are being purchased. Contracts don’t automatically follow the assets; each one generally needs to be assigned to the buyer, which usually means getting the other party’s consent.
Contract Types and What to Check
| Contract type | What typically triggers a problem | What to check now |
|---|---|---|
| Commercial lease | Assignment clause requiring landlord consent | Whether the lease restricts assignment and what notice period it requires |
| Supplier and vendor agreements | Exclusivity, minimum-purchase, or termination-on-sale clauses | Whether the agreement can be assigned or must be renegotiated |
| Customer contracts | Change-of-control or anti-assignment clauses | Whether key customers can terminate on a change of ownership |
| Equipment leases and financing | Lender or lessor consent requirements | Whether existing debt or leases need to be paid out or assumed |
| Franchise agreements | Franchisor approval and possible new disclosure | Whether a transfer counts as a new grant requiring fresh compliance |
| Licences and permits | Whether they attach to the person, the corporation, or the premises | Whether the buyer needs to apply fresh or can take an assignment |
Commercial Leases Get Special Attention
If your business operates from leased premises, the lease is usually the single most important contract to sort out early — a buyer who can’t be confident of the space often won’t proceed at all. Under Ontario’s Commercial Tenancies Act, where a lease prohibits assignment or subletting without the landlord’s consent, that consent is deemed not to be unreasonably withheld unless the lease itself says otherwise. In practice, that means the landlord generally can’t refuse a qualified buyer arbitrarily — but the lease’s own wording still controls, and landlords often use a requested assignment as leverage to renegotiate rent or term. Start this conversation with your landlord early; it is rarely quick.
Building an Assignment Timeline
- Inventory every contract of real significance — leases, supplier and customer agreements, equipment financing, franchise and licensing arrangements — and pull the actual signed documents, not just your memory of the terms.
- Flag anti-assignment and change-of-control clauses in each one, and note whether consent is required, and from whom.
- Prioritize by risk — start with the contracts that would hurt the deal most if they fell through: your premises lease, your largest customer contracts, and any exclusive supplier arrangements.
- Approach counterparties before you’re under a tight closing deadline. Landlords, key suppliers, and major customers respond better to advance notice than to a request buried in a compressed closing timeline.
- Document every consent in writing and keep it with your other closing deliverables — a verbal "sure, that’s fine" from a landlord or supplier is not something a buyer’s lawyer can rely on.
Frequently asked questions
Does a share sale mean I don’t have to think about this at all?
Mostly, yes — the corporation’s contracts continue because the corporation itself hasn’t changed. But check each significant contract for a change-of-control clause anyway; some agreements are drafted to trigger on a change in share ownership even though the contracting entity is the same.
What happens if a key customer contract can’t be assigned?
Options vary by situation — sometimes the customer agrees to a new contract with the buyer, sometimes the seller stays involved briefly to bridge the relationship, and sometimes the parties adjust the purchase price to reflect the lost or at-risk revenue. Raise this with your lawyer as soon as you spot it, not at the closing table.
Can a landlord simply refuse to let me assign my lease?
Not arbitrarily, if the lease is silent or only requires that consent not be unreasonably withheld — but a landlord can have legitimate, commercially reasonable objections, and some leases are drafted to give the landlord broader discretion. Read your specific lease before assuming either way.
Should I tell suppliers and customers I’m selling before a deal is signed?
Usually not, and confidentiality is typically a binding term even in a non-binding letter of intent. Most assignment conversations with third parties happen after a purchase agreement is signed but before closing, on a timeline your lawyer helps you manage.
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