- In a share purchase, the corporation that has always contracted with the supplier continues to exist; it just has new owners internally.
- Before assuming a key supplier relationship simply carries over, check the underlying contract for an assignment clause.
Customers tend to get the attention when a business changes hands, but suppliers matter just as much to keeping the lights on. A supplier who isn’t properly notified, or whose contract wasn’t reviewed before closing, can pause deliveries, revoke credit terms, or simply keep billing and shipping to the wrong entity. Notifying suppliers properly after a purchase is less about courtesy and more about business continuity.
This article covers what buyers typically need to tell suppliers, what depends on deal structure, and what to check before assuming a supplier relationship simply continues.
What Changes for Suppliers Depends on Deal Structure
In a share purchase, the corporation that has always contracted with the supplier continues to exist; it just has new owners internally. Supplier contracts generally continue without needing to be reassigned, though suppliers still deserve to know who they’re now dealing with on the ownership and management side.
In an asset purchase, the buyer is typically a different legal entity than the seller’s corporation. Existing supplier contracts don’t automatically transfer to the buyer just because the business changed hands; each contract needs to be reviewed to see whether it can be assigned, and many supplier agreements include clauses requiring the supplier’s consent before that happens.
Information to Give Each Supplier
| What to Provide | Why It Matters |
|---|---|
| New legal entity name (if different) and any registered trade name | Ensures invoices and shipments are addressed correctly |
| Updated billing and remittance details | Prevents payments or invoices going to the wrong party |
| New authorized contacts for ordering and accounts payable | Avoids delays from orders routed to former staff |
| Confirmation of credit terms going forward | Some suppliers reassess credit limits when the underlying entity changes |
| Timing of the ownership change | Helps the supplier plan around the transition rather than being surprised |
Contracts That Need the Supplier’s Consent
Before assuming a key supplier relationship simply carries over, check the underlying contract for an assignment clause. Many supply agreements, especially longer-term ones with pricing or exclusivity terms, require the supplier’s written consent before the agreement can be assigned to a new entity. In an asset purchase, this review should happen during due diligence, not after closing, so there’s no gap in supply if a supplier decides not to consent or wants to renegotiate terms as a condition of doing so.
Checking for Existing Security Interests
If the deal involves purchasing equipment or inventory, it’s worth confirming whether a supplier or lender has a registered security interest against those assets under Ontario’s Personal Property Security Act. A PPSA search lets a buyer check the public registry for existing registrations before closing, so outstanding purchase-money security interests or equipment financing arrangements are dealt with as part of the deal rather than surfacing afterward. As of mid-2026, an online or certificate PPSA search costs $8, a figure worth confirming before you rely on it, since government fee schedules change.
A Supplier Notification Checklist
- [ ] Identify which supplier contracts need review for assignment or consent requirements before closing
- [ ] Run PPSA searches against key equipment and inventory before closing
- [ ] Prepare a notification for each supplier with updated entity name, billing details, and contacts
- [ ] Confirm credit terms directly with suppliers rather than assuming they carry over
- [ ] Time notifications so deliveries aren’t disrupted around the closing date
- [ ] Keep a record of which suppliers have formally consented to any required assignment
Frequently asked questions
Do we need every supplier’s consent before closing, even for routine month-to-month accounts?
Not necessarily. Routine accounts without a formal contract, or without an assignment clause, may simply need updated notification rather than formal consent. Longer-term contracts with specific assignment language are the ones that typically need a documented consent process.
What happens if a supplier refuses to consent to an assignment?
This depends on the specific contract and how important that supplier relationship is to the business. It’s worth identifying key suppliers with restrictive contracts early in due diligence, so there’s time to negotiate or find alternatives before closing rather than after.
Should the notification come from the seller, the buyer, or both?
A joint notification is common and often reassures suppliers that the transition is orderly, but either party can send it depending on what’s practical. What matters most is that the supplier gets accurate, timely information.
Is a PPSA search only relevant for large equipment purchases?
No. A PPSA search can reveal security interests against inventory, receivables, and other personal property too, not just major equipment, which is why it’s a standard part of due diligence on most business asset purchases.
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