Buying a business

How to minimize your risk

How to buy or sell a business

When buying or selling a business, such as a restaurant, a shop, a retail store, an online store, a franchise or a pharmacy, thorough verification and due diligence is in order.

Our role as Notary is to assure a secure transaction by performing a legal due diligence and minimizing the risk, in order to create a fluid and proactive exchange.

Purchase Agreements

  • What is a share purchase agreement

    A share purchase agreement is an contract that outlines the terms and conditions of the purchase of the shares of a corporation.

    When acquiring the shares of a corporation in a share purchase agreement, you are also acquiring all liabilities related to the corporation. Therefore, it is necessary to consult an accountant to review the financial statements and legal liabilities of the enterprise.

  • What is an asset purchase agreement

    An asset purchase agreement is a contract that outlines the terms and conditions of the purchase of assets of another corporation.

    Assets can include equipment, inventory, name, goodwill, etc. Unlike share asset purchase agreements, you do not acquire the liabilities of the corporation.

    When purchasing the assets of the corporation it is important to consult with a notary to obtain release and verify that the assets are free and clear of liens and any other charges.

Due Diligence Checklist

  • Corporate Organization

    • Revision of corporate minute book, including articles of incorporation, capital-stock, board of directors resolutions, shareholder resolutions
    • Certificate of incorporation, amendments or modification
    • Verification of corporate filings
    • Verification of provincial immatriculation
    • Unanimous shareholder agreements
    • List of Officers
    • List of Directors
    • List of Shareholders and the number of shares held by each shareholder
    • List of business names
    • Corporate history
    • Is there an insurance of directors and officers ?
    • Share transfer records
    • Copies of any material transaction related to the corporation (i.e. fusion, signification acquisitions, restructurings, reorganization

  • Commitments and Assumed Contracts

    • Copies of any shareholder agreements, amendments, voting trusts, etc.
    • Copies of partnership agreements and joint ventures
    • List of all corporate contracts and commitments
      • Hypotecs, loans, debts, liens
      • Leases of equipment or assets
      • Leases of personal property
      • Real Estate leases and published notice of lease
      • Bank commitments letters and credit renewals
      • Contracts with agents, consultants, distributors
      • Contracts with suppliers and contracts
      • Powers of attorney’
      • Non-compete agreements, restrictive agreements, secrecy agreements, agreements which limit the activity or business of the corporation
      • Office locations
      • Online store and web addresses
      • Phone addresses
      • Utility contract (phone, internet, hydro)
      • Advertising contracts
      • POS system contracts
      • Licence agreements
    • Copies of standard policy, customer warranties, purchase orders, invoices
    • Is the corporation in default under any contract or commitment ?

  • Government Regulation

    • Respect of environmental laws
    • Respect of occupational health and safety
    • Respect of Worker’s compensation
    • Respect of municipal by-laws
    • Respect of zoning by-laws

  • Litigation

    • List of any litigation (past, pending or threatened)
    • Copies, assumation or consent of existing litigation
    • Access to all litigation files and documentation

  • Financial

    • Revision of financial statements, audits and working papers
    • Copies of most recent statements
    • Copies of recent monthly operating statements
    • Detailed list of pre-paid expenses
    • List of accounts receivable
    • List of customers, if available
    • List of suppliers
    • List of fixed asset purchases
    • List of loans and debts
    • List of bank accounts, safety deposit boxes and authorized signatories
    • Strategic plan and future projections, if any
    • Detailed list of inventory, inventory evaluation, release from suppliers for inventory
    • Aged list of payable
    • Price and documentation

  • Tax Matters

    •  Copies of provincial and federal tax returns, notice of assessments
    • Sales tax returns files and notice of assessments
    • Description of tax audit issues or notifications or potential audit issues
    • Details of significant fiscal or tax planning
    • Details of any loss carry forwards
    • Details of any tax credits
    • Amount of capital dividends
    • Adjusted cost base of capital properties

  • Employees

    • Copies of any union agreements
    • List of employees, start date, compensation, prior service, experience, pending claims
    • List of salaries and bonuses, share bonus plans
    • List of labour and other employee related issues, complaints, investigations
    • Group health and accident plans
    • Pension Fund liabilities and assets
    • Payroll details
    • Special employee programs

  • Privacy

    • Compliance with privacy and personal information regulation

  • Environmental Matters

    • Compliance with provincial and federal environmental laws
    • Environmental policy or management assessment
    • Decontamination of leased sites
    • Environmental reports and reviews

  • Insurance

    • Copies of insurance policies in effect
    • Summary of claims under the insurance policy in the last 5 years

  • Assets

    • List of real property assets
      • Title examination
      • Mortgages and hypothecs
      • Liens
      • Municipal, school and business tax
      • Permits and licence
      • Building structural plans and other plans
      • Lease contracts if any
    • List of movable property
      • Vehicles
      • Equipment
      • Verification of liens and encumbrances
    • List of names, trademarks, copyrights, patents, service marks logos, designs (past, assigned and pending)

Clients that we've worked with