Carving the building out of the deal, from another continent

The situation

The letter arrived by email while Parminder was finishing a shift at a farm several time zones away from Barrie, and it took two readings to understand what it was actually proposing. It was a letter of intent from a prospective buyer, offering to purchase the operating company Parminder had built up over six years, a small business that had grown from a side project run on weekends into something turning over roughly a hundred thousand dollars a year, with a handful of part-time staff. What caught Parminder's attention was the specific wording: the buyer wanted the shares of the operating company, but the letter explicitly excluded the building the business operated out of, a modest commercial property that a second company, wholly owned by Parminder as well, held title to.

Parminder had set the arrangement up years earlier without much thought to why it was structured that way, mostly on the advice of an accountant who suggested keeping real estate separate from an operating business for tax reasons. It had never mattered in practice, since both companies were run the same way, out of the same building, under the same ownership. Now it mattered a great deal, because the offer on the table was for the operating company only, and Parminder needed to understand exactly what that meant for the building, for the lease arrangement between the two companies, and for what Parminder would actually be left holding once the sale closed.

The complicating factor, on top of everything else, was distance. Parminder had moved abroad for steady work two years earlier and had been managing the Barrie business remotely ever since, checking in by video call and relying on a part-time manager for day-to-day decisions. Any legal process built around the assumption that a client could walk into an office, sign a document, or attend a meeting in person was not going to work. Every step of whatever came next would have to happen across a significant time difference, by video call and courier and electronic signature, with no room for the kind of in-person handshake that closings often lean on.

Parminder forwarded the letter of intent to us the same day it arrived, with a short message: 'Can we even do this from here.' The letter was signed by Feng, who ran a larger operator in the same line of business and was looking to add Parminder's company to an existing group, with Jing named as the lawyer handling the deal on Feng's side. Neither of them knew yet that Parminder was overseas; the letter had simply been addressed to the operating company's registered office in Barrie.

Why this was harder than it looked

On paper, separating a building from an operating company sounds like it should already be done, since Parminder had, in fact, structured the two as separate corporations from the start. The complication was that six years of running both companies informally had blurred lines the letter of intent assumed were sharp. The operating company had never paid a fully documented, arm's-length rent to the building-owning company; the arrangement had been closer to an internal transfer, adjusted casually whenever cash flow was tight. There was no formal lease agreement, just an understanding.

That mattered because a share purchase does not, by itself, do anything to the building or create any new right to occupy it. The operating company would keep exactly whatever arrangement it already had, and since that arrangement had only ever been an informal one with a related-party landlord, what it actually had might be nothing more than a month-to-month or at-will permission that the building-owning company could end at any time, including, potentially, on the very change of control the sale would bring about. A buyer could not simply assume continued use of the building would survive closing; if anything, a change of ownership was the kind of event an arrangement this informal was least likely to survive. Before the sale could close on the basis the letter of intent described, we needed an actual lease between the two companies, at a rent that would hold up as reasonable if anyone ever looked at it later, with a term long enough to give the buyer confidence in continued occupancy but short enough that Parminder was not locked into terms that undervalued the property once the operating company had new owners.

There was a second issue underneath the first. Some of the equipment used by the business, including a piece of machinery Parminder had bought personally rather than through either company, sat in a grey area of ownership that needed sorting before anyone could say cleanly what was being sold and what was staying behind. Untangling personal assets from company assets after years of informal use is common, but it takes real documentation to do properly, and it cannot be skipped just because a deal is otherwise moving quickly.

Layered on top of both of these was the distance problem. Ontario corporate filings, lease agreements, and closing documents generally assume a signatory who can be reached, verified, and can sign within normal business hours. Coordinating signatures, notarization where required, and document delivery across a significant time difference, with a buyer's lawyers working on their own Ontario business-hours schedule, meant every step took longer to arrange than it would have if Parminder had simply been down the street.

Feng, to his credit, did not treat any of this as a reason to walk away or to push for a lower price once he learned Parminder was managing the file from overseas. Jing, on the other side, was less patient about it early on, initially proposing a closing timeline that assumed same-day, same-time-zone document turnaround, which we had to push back on directly once it became clear it simply was not workable given how the signing and courier logistics would actually have to unfold.

What we did

1. Reviewed both companies' corporate records and the informal arrangement between them to understand exactly how the building had actually been used and paid for over the years, since the letter of intent's assumption of a clean separation did not match the reality of how the two companies had operated day to day. This review became the map for every document that followed, since we could not fix a relationship we had not first understood in its actual, undocumented form.
2. Drafted a formal lease agreement between the building-owning company and the operating company, setting a defensible market rent and a term structured to protect Parminder's ongoing interest in the property after the operating company changed hands, so the buyer would be purchasing a business with a documented right to occupy its premises rather than an informal understanding that could be challenged or renegotiated later.
3. Sorted out the equipment ownership question by reviewing purchase records and confirming which items belonged to Parminder personally, which belonged to the operating company, and which had been paid for by the building company, then documented a clean transfer of anything that needed to move into the operating company before the sale, so the deal would not stall later over an asset nobody could say who actually owned.
4. Set up video-call meetings scheduled around Parminder's shift work and time zone rather than expecting Parminder to adjust to Ontario business hours, which meant some calls happened very early or very late in Parminder's day, but kept Parminder genuinely informed and able to make real decisions rather than simply signing whatever arrived by email. Explaining each document before it was sent for signature took longer than a quick summary would have, but it meant nothing closed without Parminder actually understanding it.
5. Arranged remote execution of every corporate and closing document using electronic signature and courier services for anything that required an original, coordinating carefully with the buyer's lawyers so that documents requiring signature within a specific window did not get stranded by the time difference between Parminder's location and Ontario. A single missed cutoff on either side could have added days to a schedule that already had little slack in it.
6. Negotiated the purchase agreement's carve-out language directly with the buyer's counsel to make sure the building's exclusion from the sale was described precisely, covering the new lease, the equipment now properly allocated between the companies, and confirmation that the operating company being sold held no residual interest in the property Parminder intended to keep. Precise carve-out language mattered because a vague exclusion clause is exactly the kind of gap a buyer's counsel can reopen after closing, once there is no more leverage on the seller's side to fix it.
7. Coordinated the actual closing across the time difference by building in a longer closing day than usual, treating the transaction as spanning two calendar days across the two locations rather than assuming everything could happen inside a single afternoon, which avoided the last-minute scramble that a same-day, same-time-zone closing schedule would have created. Building the extra day in deliberately, rather than hoping it would not be needed, is what kept the closing from becoming its own crisis.
8. Pushed back directly on Jing's initial closing timeline once it became clear it did not account for the realities of remote signing, proposing instead a two-day closing window with clearly staged deliverables, which Jing accepted once we walked through exactly why a single-day schedule would have put the whole closing at risk over something as basic as a missed courier cutoff.

The outcome

The sale closed on the terms Parminder wanted: the buyer took ownership of the operating company, the building stayed with Parminder through the second company, and the new lease meant the business continued operating out of the same location without interruption. Parminder now receives rental income from a company with no operating risk of its own, a materially different and steadier position than owning a business that depended on day-to-day management from thousands of kilometres away.

None of this happened faster than an in-person deal would have. The distance added real time to the process, several weeks beyond what the buyer initially expected, mostly around coordinating signatures and confirming the lease terms across time zones. The buyer's lawyers were understanding about it once the reasons were explained, but it meant the letter of intent's original closing date slipped, and Parminder had to accept that some calls simply happened at inconvenient hours because there was no other way to keep the file moving.

What made the outcome a clean one rather than a compromise was that the separation between the building and the business, informal for six years, was finally documented properly before it had to survive scrutiny from someone outside the family. Parminder still manages the rental arrangement remotely today, but it is a far simpler thing to manage than the business itself ever was, and the paperwork now says clearly what everyone had always assumed was true.

Feng's group took over the operating company and kept the existing part-time staff on, which was not a condition Parminder had insisted on but was glad to see happen anyway. Jing, once the closing was behind them, told us the staged timeline had actually made the file easier to track than several same-time-zone deals she had run that year, since nothing was left to a last-minute same-day scramble. Parminder still checks in on the building's tenant relationship by video call every few months, a much lighter task than running the business itself ever was from that same distance.

What you can learn from this