What we do
- Asset vs. share sale analysis
- Lifetime Capital Gains Exemption (LCGE) qualification
- Letter of intent, APA/SPA, and ancillary agreements
- Closing and post-closing tax compliance
CANADA'S TAX & BUSINESS LAWYERS
Selling or Acquiring a Private Canadian Business? Avoid Potential Legal Issues
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We have Helped Hundreds of Individuals Acquire a Business in Canada!
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Business Sales and Acquisitions
In selling or acquiring a private Canadian business, there are many potential legal issues which require flexible and well-researched solutions.
Like an asset sale, the purchasers’ interests in a share sale will generally be contrary to that of the vendor. For example, the purchaser generally would seek to retain a high stated capital account (i.e., funds that can be returned to shareholders tax free) for the subject shares, where present shareholders may desire a tax-free return of retained earnings prior to their business’s sale. This, among other tax considerations, will influence negotiations between transacting parties.
Negotiations on an asset sale will naturally come down to the allocation of the purchase price. It is well advised to have counsel on how receipts (from the vendors perspective) or outlays (from the purchasers’ perspective) will influence tax liabilities in the year of a transaction, or for future tax years.
Book a Consultation with a Lawyer
Business Sales and Acquisitions
Like an asset sale, the purchasers’ interests in a share sale will generally be contrary to that of the vendor. For example, the purchaser generally would seek to retain a high stated capital account (i.e., funds that can be returned to shareholders tax free) for the subject shares, where present shareholders may desire a tax-free return of retained earnings prior to their business’s sale. This, among other tax considerations, will influence negotiations between transacting parties.
Negotiations on an asset sale will naturally come down to the allocation of the purchase price. It is well advised to have counsel on how receipts (from the vendors perspective) or outlays (from the purchasers’ perspective) will influence tax liabilities in the year of a transaction, or for future tax years.
Book a Consultation with a Lawyer
From a tax law perspective, the following issues may be considered from the vendors perspective:
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Years of experience in tax law gives us an edge on advising your business sale or acquisition. Call us for Assistance!
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Working with us
Every engagement begins with a tax-aware review of your goals. We pair the corporate work — incorporations, agreements, transactions — with the tax planning that lets the structure deliver value over the long term. Your consultation is confidential, and once we are retained, communications are protected by solicitor–client privilege.
We work on fixed-fee quotes for most corporate matters so you know the cost up front.
Frequently asked questions
Should I sell my business as an asset sale or a share sale?
Sellers usually prefer a share sale (Lifetime Capital Gains Exemption can shelter up to ~$1M+ of gain on Qualified Small Business Corporation shares). Buyers usually prefer asset sales (step-up in basis, lower successor-liability risk). The price negotiation is partly about who absorbs the tax differential.
What is the Lifetime Capital Gains Exemption?
An indexed exemption for capital gains on Qualified Small Business Corporation shares (and qualified farm/fishing property). Multiplying it across family members through estate freezes and family trusts is one of the highest-leverage tax-planning moves available to Canadian business owners.