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Business Sales Agreement for Canada

Business Sales Agreement Template for Canada

A comprehensive legal document governed by Canadian law that facilitates the sale and purchase of business assets or shares between commercial entities. This agreement outlines the terms and conditions of the transaction, including purchase price, payment terms, representations and warranties, conditions precedent, and post-closing obligations. It incorporates provisions compliant with federal and provincial legislation, including the Sale of Goods Act, Competition Act, and relevant tax laws, while providing mechanisms for dispute resolution and risk allocation between the parties.

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Business Sales Agreement

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What is a Business Sales Agreement?

The Business Sales Agreement serves as the primary legal instrument for documenting the sale and purchase of business assets or shares in Canada. This document is essential when one business entity wishes to acquire another's assets, operations, or shares, whether in whole or in part. It addresses crucial aspects such as asset valuation, liability transfer, employee matters, and regulatory compliance under Canadian federal and provincial laws. The agreement protects both parties' interests by clearly defining the transaction scope, purchase price, payment terms, representations and warranties, and post-closing obligations. It is particularly important for ensuring compliance with Canadian commercial law, tax regulations, and industry-specific requirements while providing a clear framework for completing the transaction and managing potential disputes.

What sections should be included in a Business Sales Agreement?

1. Parties: Identifies and provides full legal details of the seller and buyer entities

2. Background: Provides context for the agreement and outlines the intention of the parties

3. Definitions: Defines key terms used throughout the agreement

4. Sale and Purchase: Details the core transaction, including the business assets or shares being sold

5. Purchase Price: Specifies the purchase price, payment terms, and any adjustments

6. Closing: Sets out the completion date and closing procedures

7. Seller's Representations and Warranties: Lists the seller's assertions about the business, assets, and operations

8. Buyer's Representations and Warranties: Lists the buyer's assertions about their capacity and authority to enter the agreement

9. Conditions Precedent: Specifies conditions that must be met before closing

10. Covenants: Details ongoing obligations of both parties before and after closing

11. Indemnification: Outlines how parties will be protected against losses and liabilities

12. Confidentiality: Establishes obligations regarding confidential information

13. Termination: Specifies circumstances under which the agreement can be terminated

14. Dispute Resolution: Sets out procedures for resolving disputes

15. General Provisions: Includes standard boilerplate clauses such as notices, amendments, and governing law

What sections are optional to include in a Business Sales Agreement?

1. Employee Matters: Required when the sale includes transfer of employees

2. Intellectual Property: Needed when significant IP assets are involved in the sale

3. Real Property: Required when real estate assets are part of the transaction

4. Environmental Matters: Necessary for businesses with environmental considerations or liabilities

5. Tax Matters: Detailed tax provisions when complex tax implications exist

6. Non-Competition: Used when restricting seller's future competitive activities

7. Transition Services: Required when seller will provide post-closing support

8. Earn-out Provisions: Used when part of purchase price is contingent on future performance

9. Third Party Consents: Required when material contracts need third party approval for transfer

What schedules should be included in a Business Sales Agreement?

1. Schedule A - Purchased Assets: Detailed inventory of all assets included in the sale

2. Schedule B - Excluded Assets: List of assets specifically excluded from the sale

3. Schedule C - Assumed Liabilities: Details of liabilities being assumed by the buyer

4. Schedule D - Purchase Price Allocation: Breakdown of purchase price across asset categories

5. Schedule E - Material Contracts: List of important contracts being transferred

6. Schedule F - Intellectual Property: Detailed list of IP assets included in the sale

7. Schedule G - Real Property: Details of any real estate included in the transaction

8. Schedule H - Employee Information: List of employees and their key employment terms

9. Appendix 1 - Closing Checklist: List of documents and actions required for closing

10. Appendix 2 - Form of Bill of Sale: Template for the transfer document to be used at closing

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Cost

Free to use
Relevant legal definitions










Clauses


















































Relevant Industries

Manufacturing

Retail

Technology

Professional Services

Healthcare

Real Estate

Construction

Hospitality

Transportation

Energy

Agriculture

Mining

Financial Services

Telecommunications

Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Executive Leadership

Risk Management

Operations

Tax

Compliance

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

Corporate Lawyer

Business Development Manager

Mergers & Acquisitions Director

Finance Director

Commercial Director

Operations Manager

Risk Manager

Corporate Secretary

Business Owner

Managing Director

Transaction Advisory Partner

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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