The Legal Aspects of Buying or Selling a Business in Ontario

Whether you’re buying or selling a business in Ontario, the transaction involves numerous legal considerations. Both buyers and sellers must be diligent to ensure the process is compliant, fair, and protects their financial interests.

The first step is determining whether the deal will be structured as a share sale or an asset sale. In a share sale, the buyer purchases the shares of the company, effectively taking over its assets and liabilities. In an asset sale, the buyer only acquires specific business assets, which may be less risky from a liability standpoint.

Key documents in the process include letters of intent, purchase agreements, and non-disclosure agreements. Due diligence is essential, including reviewing contracts, financials, leases, intellectual property, and employee agreements.

Ontario law also requires compliance with employment standards legislation, HST considerations, and potential bulk sales requirements, although the latter has been repealed in many contexts.

Legal representation ensures that all terms are negotiated clearly and documented properly, reducing the risk of future disputes. Whether you’re buying or selling, a lawyer will help with contract drafting, due diligence, and closing procedures.

If you’re considering buying or selling a business in Ontario, contact Hilborn and Konduros in Cambridge for experienced legal support.