Document background
The Management Buyout Agreement is a crucial document used when a company's existing management team wishes to acquire ownership from current shareholders or owners. This agreement, structured under Canadian federal and provincial law, provides a comprehensive framework for the transaction, including detailed provisions for purchase mechanics, financing arrangements, and ongoing business operations. It addresses key aspects such as share transfer requirements under the Canada Business Corporations Act, provincial securities regulations, and tax implications under the Income Tax Act. The document is particularly relevant in succession planning scenarios or when owners wish to exit while maintaining business continuity through existing management. It includes essential provisions for due diligence, warranties, indemnities, and post-closing covenants, ensuring all parties' interests are protected throughout the transition of ownership.
