What a Business Purchase Lawyer Actually Does in Ontario, From Offer to Closing

"You need a lawyer to look it over" undersells the job. A business purchase lawyer isn't there to proofread a document once everyone has already agreed on everything — the concrete work happens at nearly every stage of the deal, often before a single word of the purchase agreement is drafted.

Here's what that work actually looks like, stage by stage.

From Offer to Closing: A Quick Reference

Before the Letter of Intent

Even before there's a document to sign, a lawyer can advise on whether a deal is likely to be structured as an asset purchase or a share purchase, and what that choice will mean for liability exposure and the shape of due diligence to come. Getting this input early means the LOI itself gets drafted around the right structure from the start.

Reviewing and Negotiating the LOI

A lawyer reads the LOI clause by clause to identify which terms are genuinely non-binding and which — typically confidentiality, exclusivity, and cost allocation — are drafted to bind you immediately on signing. They negotiate those binding provisions specifically, since they take effect the moment you sign regardless of what happens with the rest of the deal.

Running Due Diligence

During due diligence, a lawyer coordinates the review of corporate records and the minute book, material contracts, leases, employee records, intellectual property, licences and permits, litigation history, insurance, and (working alongside your accountant) tax compliance. Anything concerning gets translated into a specific ask: a representation and warranty, an indemnity, a condition to closing, or a price adjustment.

Drafting and Negotiating the Purchase Agreement

This is the core of the legal work. A lawyer drafts or negotiates the Share Purchase Agreement or Asset Purchase Agreement, including representations and warranties, covenants, closing conditions, indemnities, and a disclosure schedule that qualifies what the seller has represented. Many agreements also include a working-capital adjustment mechanism and a holdback or escrow securing post-closing indemnity claims — both negotiated in detail by the lawyers on each side.

Managing Closing Conditions and Consents

Before closing can happen, a lawyer chases down and confirms the conditions the purchase agreement requires: landlord consent to assign the lease, payout and discharge of the seller's existing lender security, any required corporate approval (for example, shareholder approval by special resolution where a corporation is selling all or substantially all of its assets outside the ordinary course of business), and confirmation of the corporation's good standing.

At the Closing Table

On closing day, a lawyer manages the actual exchange of signed documents and funds, and — where a vendor take-back or other security is part of the deal — arranges registration of that security, typically under the Personal Property Security Act for personal property, and a mortgage or charge if real property is involved.

After Closing

The work doesn't always stop at closing. A lawyer typically remains involved through the resolution of any working-capital adjustment, monitoring of the holdback or indemnity period, and — where a dispute arises over representations, warranties, or the closing statement — managing how that gets resolved under the mechanism the purchase agreement specifies.

Frequently asked questions