3 Matter Plans Included
-
ALERTS - Nil
-
Full Commentary - Sale of Business (AB)
-
Reference materials
-
AI Prompts
-
Electronic Signing and Remote Witnessing
-
Further information
Other trusted and useful resources
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
-
Overview
The sale of a business in Alberta is subject to a number of laws and regulations. Before considering those laws and regulations the structure of the business and the tax consequences of the transaction need consideration. For instance, if a company or trust owns the business, there is a need to ...
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A. Getting the matter underway
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File cover sheet - Sale of business
-
To do list - Sale of business
-
Client details, verification, and source of funds
-
First steps
-
Retainer instructions - Sale of business
-
Conflict of interest check
-
Initial letter to client enclosing retainer agreement
-
Retainer agreement - Alberta
-
Scope of work - Sale of business
-
Enclosure - Summary of relevant considerations for the sale of a business
-
If required - Authorities and services agreements
-
Authority to contact accountant
-
Services agreement with tax advisor
-
Broker services agreement - Sale of business
-
Generic services agreement
-
-
Time and costs estimates
-
If required - Costs disclosure update and a non-engagement letter
-
Letter to client updating costs disclosure
-
Non-engagement letter
-
-
General deeds, agreements, execution clauses, and statutory declarations
-
Deeds and Agreements
-
Deeds
-
Confidentiality deed
-
Deed for general use
-
Deed of assignment of agreement
-
Deed of gift
-
Deed of guarantee
-
Deed of release
-
General deed of indemnity
-
Library of standard clauses for deeds
-
Amendment clause
-
Confidentiality clause for defined information - All parties
-
Confidentiality clause for defined information - One party
-
Confidentiality clause for terms of agreement - All parties
-
Confidentiality clause for terms of agreement - One party
-
Costs clause
-
Counterparts clause
-
Dispute resolution clause
-
Events beyond control clause
-
Governing law and jurisdiction clause
-
Interpretation clause
-
No assignment clause
-
Notices clause
-
Severance clause
-
Waiver clause
-
Whole agreement clause
-
-
-
Agreements
-
Agreement for general use
-
Heads of agreement
-
Non-disclosure agreement - Formal
-
Non-disclosure agreement - Informal
-
Library of standard clauses for agreements
-
Amendment clause
-
Confidentiality clause for defined information - All parties
-
Confidentiality clause for defined information - One party
-
Confidentiality clause for terms of agreement - All parties
-
Confidentiality clause for terms of agreement - One party
-
Costs clause
-
Counterparts clause
-
Dispute resolution clause
-
Events beyond control clause
-
Governing law and jurisdiction clause
-
Interpretation clause
-
No assignment clause
-
Notices clause
-
Severance clause
-
Waiver clause
-
Whole agreement clause
-
-
-
Execution clauses
-
Execution clauses - Agreements and contracts
-
Execution clauses - Deeds
-
-
Statutory declaration
-
Statutory declaration
-
-
Standard annexure note for documents
-
-
-
B. Preliminary considerations
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Identifying the nature of the transaction
The transaction might involve the sale of assets, the sale of the shares, or a combination of both. Deciding on the best course of action involves an analysis of factors, such as:
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-
Tax considerations
Capital gains tax Whether it involves the sale of assets, intellectual property, or shares, the sale of a business entity generally attracts capital gains tax. This is a primary tax consideration.
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-
Considerations for franchises
The Franchises Act 2000 and the regulations made under the Act, including the Franchises Regulation, Alta Reg 240/1995, encourage fair dealing between all parties to a franchise agreement and impose duties and penalties in certain cases.
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C. Pre-sale negotiations
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Purchase price
Most sellers have a set price in mind for the sale of their business, but some ask for assistance with the valuation. This general consulting work is not legal advice. A finance or accounting professional can be retained to value the business and its assets.
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Confidentiality
The seller or their agent usually requires prospective buyers to enter into a confidentiality agreement before disclosing financial and other information about the business. Brokers sometimes require this even before the business name is revealed. The purpose is to ensure that all information ...
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Non-disclosure agreement - Formal
-
Exclusivity period
It can be advantageous to a prospective buyer, particularly in a strong market, to negotiate a period of exclusivity. During this period, the seller cannot negotiate with anyone else. This allows the buyer sufficient time to conduct their due diligence enquiries. Investigating a business involves ...
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-
Letter of intent or term sheet
Confirming the general understanding of the key terms of the transaction is important. This should be done before due diligence and before drafting the purchase agreement. The letter of intent or term sheet is a precursor to a formal purchase agreement and is not usually binding on the parties, ...
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Term sheet
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Due diligence
Buyer due diligence Due diligence involves making reasonable investigations before deciding to enter the agreement to minimize, or at least identify, the risk involved.
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-
D. The purchase agreement
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Disclosure requirements
Examples of documents that are typically attached to the purchase agreement are:
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Form of purchase agreement
There is no prescribed form of agreement for the sale of a business. A purchase agreement is drafted by the seller's or buyer's legal representative. Various agreements are offered commercially, including the Business Purchase Agreement, available on the matter plan. The sale of a business may ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Business purchase agreement
-
Library of purchase agreement annexures
-
Blank annexure page
-
Annexure with employee details
-
Annexure of plant fixtures and fittings
-
Annexure of registered vehicles
-
Annexure detailing ongoing agreements
-
-
Library of special conditions for business
-
Arbitration
-
Closing - Time is of the essence
-
Computer software and domain names
-
Confidentiality
-
Domain names, websites, and email addresses
-
Entering into agreement on less than 10% deposit
-
Guarantee for corporate buyer
-
Interest to run from expiry of notice to complete
-
Late completion - Payment of interest
-
Liquor licence transfer
-
Buyer to comply with outstanding notice
-
Registered vehicles
-
Restraint of trade variation of standard clause
-
Software
-
Seller to comply with outstanding notice
-
Trial period
-
-
Share purchase agreement
The company that owns and conducts the business can be sold rather than the business assets. This involves the sale of the shares of the company. While this may lead to a more straightforward transfer of underlying assets ownership, many buyers do not want to take the risk of inheriting the ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Share purchase agreement
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If required - Share transfers
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Share transfers
If an underlying business entity is being sold, a transfer of the shares in that entity to the buyer is required. This does not necessarily require any registration with the Alberta or federal government. However, the Canada Revenue Agency and the bank will have to be notified of any new registered ...
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Letter to shareholder enclosing notice of meeting
-
Notice of board and shareholder meeting including resolutions
-
Share certificate
-
Capitalization table
-
Agreement for sale of units in an income trust
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If required - Intellectual property transfers
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Intellectual property transfers
Business names Most business names are owned by or registered to the underlying entity. Business names can be registered with the Alberta government. Generally, business names are registered for use with sole proprietorships or partnerships which do not have a separate legal existence from their ...
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Trademark agreement
-
Intellectual property licence agreement
-
Licence of copyright agreement
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Real property transfers
The first step is to identify the property transferred in the purchase agreement and decide whether a transfer is required. If a share transfer is completed, and all underlying property is owned by the company, then a title transfer is not required. Once an agreement has been reached, the property ...
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Employees
If the business has employees, the buyer may or may not want those employees to continue, and the employees may or may not wish to continue. If the employee has a current contract with the seller, the buyer may have obligations to the employee under the employment contract. This is usually the case ...
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-
Domains, websites, email, and social media accounts
The purchase agreement should provide for the transfer of rights to any key domains, websites, email addresses, and social media accounts.
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-
Franchise agreements
If a franchise agreement is a major component of a sale, the parties should ensure that the agreement and rights attached to it can be transferred to the buyer. The franchisor’s consent may be required. There may be exceptions allowed in certain circumstances, such as in the case of acquisitions of ...
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-
Licence agreements
Several key licences may affect the everyday operations of the business. For example, the business could utilize various software or service subscriptions, and these may be licensed from third parties. It should be established early on whether these third parties allow the business to continue to ...
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-
Service agreements
If the seller uses key service providers for the business, such as software developers, attorneys, bookkeepers, or delivery companies, the buyer may want to continue to use these services. In some instances, these services will be important to the continuing success and operation of the business. ...
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Agency and distribution agreements
If the seller maintains an agency or distribution arrangement with any supplier, seller, or service provider, assignment or change of ownership needs to be considered. If the underlying agency or distribution agreement does not prohibit assignment and does not allow the principal to terminate the ...
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-
Suppliers and customer contracts
Some businesses may have exclusive arrangements with suppliers or customers. Assignment of these contracts must be considered. In relation to customers, there are additional considerations as customer contracts generally allow customers to terminate the agreement more freely than the business. Even ...
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-
Tax obligations
Goods and services tax Alberta does not have a harmonized sales tax. Instead, the federal government charges a 5% goods and services tax (GST). Alberta does not have a provincial sales tax.
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-
Bank accounts
The authorized signatory for the business bank accounts will usually be updated, and the bank notified as to the change of ownership. The process varies from bank to bank. It is useful to specify the seller’s responsibility in the purchase agreement.
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-
Insurance
An insurance policy may cover certain business functions, physical property, or intellectual property. For example, the business may have public liability insurance. Before the sale, it is crucial to determine whether the seller can transfer the insurance coverage to the new buyer or if the ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Library of agreements, assignments, and transfers
-
Transfer of domain name
-
Asset transfer agreement
-
Agreement for sale of personal property
-
Letter to landlord's lawyer seeking assignment of lease
-
Assignment of lease
-
Deed of assignment of agreement
-
Deed of restraint of trade
-
Distribution agreement
-
Option to purchase agreement - Business
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-
-
E. Signing
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Letter to buyer's lawyer submitting purchase agreement
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Letter to client to come and sign purchase agreement
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Letter to client with purchase agreement for signing
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Letter to buyer's lawyer with signed purchase agreement
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Letter to broker confirming purchase agreement signed
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Letter to client following signing
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F. Mid-transaction
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Conditions precedent
The purchase agreement may provide that conditions need to be met before the sale can be completed. The seller training the buyer is typical, especially for service-based businesses or businesses where complex production methods are used. All transfers such as licences, intellectual property, and ...
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Third-party escrow service
Third-party escrow services can be engaged for closing. This could be a bank, financial institution, or a law firm that acts as the trustee or escrow agent. Typically, the buyer and seller submit their documents and funds to the escrow agent for examination. Funds are released to the seller once ...
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Time for closing
The closing date is specified in the purchase agreement, which follows an established timeline. It is common to have a due diligence period of 60-90 days, which begins either from the execution of the letter of intent or term sheet or the signing of the purchase agreement. After the due ...
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Library of common forms
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Partnerships Act Forms
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Declaration of Address Change
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Declaration of Trade Name
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Personal Property Registry Forms
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Financing Statement - PPSA Security Agreement or Sale of Goods Act
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Search Request for Debtor Name(s), Serial Number(s) and/or Registration Number(s)
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Search Request for Expired/Discharged Registration Number(s)
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Service Alberta Forms
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Bill of Sale (for Vehicle Purchase)
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G. If required - Notices
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Notice to complete
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Notice of termination
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Notice of rescission
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Letter to other side serving notice
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Letter to other side's lawyer serving notice
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Letter to other side's lawyer disputing notice to complete
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H. Closing
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Adjustments
Occasionally the purchase agreement or term sheet stipulates that the purchase price is adjusted after closing to reflect a more accurate estimation of the value of the business. This is useful as some expenses, costs, and liabilities are difficult to ascertain prior to closing. Payment can be ...
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Closing adjustments sheet
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Letter to other side's lawyer with direction to pay
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Letter to client with closing figures and account
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I. Finalizing the matter
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Final actions at closing and after closing
Some of the possible actions required of the seller to complete their obligations under the purchase agreement include:
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Letter to client finalizing the matter
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Invoice recital - Sale of business
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Closing the file
-
File closing checklist
-
-
Comments and suggestions for By Lawyers
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ALERTS - Nil
-
Full Commentary - Purchase of Business (AB)
-
Reference materials
-
AI Prompts
-
Electronic Signing and Remote Witnessing
-
Business Structures and the Comparative Table (AB)
-
Further information
-
-
Overview
The purchase of a business in the Alberta involves many laws and regulations. Often, the value of the business to be purchased exists mainly in intangible assets, such as customer lists, intellectual property, market reputation, and operational knowledge. It is common for assets to be held within ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
A. Getting the matter underway
-
File cover sheet - Purchase of business
-
To do list - Purchase of business
-
First steps
-
Client details, verification, and source of funds
-
Retainer instructions - Purchase of business
-
Conflict of interest check
-
Initial letter to client enclosing retainer agreement
-
Retainer agreement - Alberta
-
Scope of work - Purchase of business
-
Enclosure - Summary of relevant considerations for the sale of a business
-
Initial letter to broker
-
Initial letter to seller's lawyer
-
If required - Authorities and services agreements
-
Authority to contact accountant
-
Services agreement with tax advisor
-
Services agreement with a business broker - Purchase of business
-
Generic services agreement
-
-
Time and costs estimates
-
If required - Costs disclosure update and a non-engagement letter
-
Letter to client updating costs disclosure
-
Non-engagement letter
-
-
General deeds, agreements, execution clauses, and statutory declarations
-
Deeds and Agreements
-
Deeds
-
Confidentiality deed
-
Deed for general use
-
Deed of assignment of agreement
-
Deed of gift
-
Deed of guarantee
-
Deed of release
-
General deed of indemnity
-
Library of standard clauses for deeds
-
Amendment clause
-
Confidentiality clause for defined information - All parties
-
Confidentiality clause for defined information - One party
-
Confidentiality clause for terms of agreement - All parties
-
Confidentiality clause for terms of agreement - One party
-
Costs clause
-
Counterparts clause
-
Dispute resolution clause
-
Events beyond control clause
-
Governing law and jurisdiction clause
-
Interpretation clause
-
No assignment clause
-
Notices clause
-
Severance clause
-
Waiver clause
-
Whole agreement clause
-
-
-
Agreements
-
Agreement for general use
-
Heads of agreement
-
Non-disclosure agreement - Formal
-
Non-disclosure agreement - Informal
-
Library of standard clauses for agreements
-
Amendment clause
-
Confidentiality clause for defined information - All parties
-
Confidentiality clause for defined information - One party
-
Confidentiality clause for terms of agreement - All parties
-
Confidentiality clause for terms of agreement - One party
-
Costs clause
-
Counterparts clause
-
Dispute resolution clause
-
Events beyond control clause
-
Governing law and jurisdiction clause
-
Interpretation clause
-
No assignment clause
-
Notices clause
-
Severance clause
-
Waiver clause
-
Whole agreement clause
-
-
-
Execution clauses
-
Execution clauses - Agreements and contracts
-
Execution clauses - Deeds
-
-
Statutory declaration
-
Statutory declaration
-
-
Standard annexure note for documents
-
-
-
B. Preliminary considerations
-
Identifying the nature of the transaction
The transaction might involve the purchase of substantial assets held by the business, the purchase of the shares of the business, or a combination of both. Deciding on the best course of action involves an analysis of factors, such as:
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Examples of holding structures for a business purchase
Example 1: Buyer is a sole proprietor
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-
The purchasing entity and tax
The rates of tax payable vary depending on the nature of the business being purchased and the ownership structure of the business.
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-
The purchasing entity and liability
Sole proprietors and unlimited liability companies A sole proprietor has unlimited liability, extending to all debts of the business. Similarly, the shareholders of unlimited liability companies are liable for the debts and obligations of the company after its liquidation.
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Considerations for franchises
The Franchises Act 2000 and the regulations made under this Act, including Franchises Regulation, Alta Reg 240/1995, encourage fair dealing between all parties to a franchise agreement, and impose duties and penalties on the parties in certain cases.
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
-
C. Pre-purchase negotiations
-
Confidentiality
The seller or their agent will typically require a prospective buyer to enter into a non-disclosure agreement before disclosing financial and other information about the business. Brokers sometimes require this even before the business name is revealed. The purpose is to ensure that all information ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Non-disclosure agreement - Formal
-
Exclusivity period
It can be advantageous to a prospective buyer, particularly in a strong market, to negotiate a period of exclusivity. During this period, the seller cannot negotiate with anyone else. This allows the buyer sufficient time to conduct their due diligence enquiries. Investigating a business involves ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Letter of intent or term sheet
Confirming the general understanding of the key terms of the transaction is important. This is done before due diligence and before drafting the purchase agreement. The letter of intent or term sheet is a precursor to a formal purchase agreement and is not usually binding on the parties, except for ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Letter of intent to the seller
-
Due diligence
Buyer due diligence Due diligence involves making reasonable investigations before deciding to enter the agreement to minimize, or at least identify, the risk involved.
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Initial letter to seller's lawyer enclosing due diligence questionnaire
-
Due diligence questionnaire - Purchase of business via acquisition of business assets
-
Due diligence questionnaire - Purchase of business via acquisition of corporation, company, or income trust
-
-
D. The purchase agreement
-
Disclosure requirements
Examples of documents that are typically attached to the purchase agreement are:
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Form of purchase agreement
There is no prescribed form of agreement for the sale of a business. A purchase agreement is drafted by the seller's or buyer's legal representative. Various agreements are offered commercially, including the Business Purchase Agreement, available on the matter plan. The purchase of a business may ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Business purchase agreement
-
Library of purchase agreement annexures
-
Blank annexure page
-
Annexure with employee details
-
Annexure of plant fixtures and fittings
-
Annexure of registered vehicles
-
Annexure detailing ongoing agreements
-
-
Library of special conditions for business
-
Arbitration
-
Closing - Time is of the essence
-
Computer software and domain names
-
Confidentiality
-
Domain names, websites, and email addresses
-
Entering into agreement on less than 10% deposit
-
Guarantee for corporate buyer
-
Interest to run from expiry of notice to complete
-
Late completion - Payment of interest
-
Liquor licence transfer
-
Buyer to comply with outstanding notice
-
Registered vehicles
-
Restraint of trade variation of standard clause
-
Software
-
Seller to comply with outstanding notice
-
Trial period
-
-
Share purchase agreement
The company that owns and conducts the business can be sold rather than the business assets. This involves the sale of the shares of the company. While this may lead to a more straightforward transfer of underlying assets ownership, many buyers do not want to take the risk of inheriting the ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Share purchase agreement
-
If required - Share transfers
-
Share transfers
If an underlying business entity is being sold, a transfer of the shares in that entity to the buyer is required. This does not necessarily require any registration with the Alberta or federal government. However, the Canada Revenue Agency and the bank will have to be notified of any new registered ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Letter to shareholder enclosing notice of meeting
-
Notice of board and shareholder meeting including resolutions
-
Share certificate
-
Capitalization table
-
Agreement for sale of units in an income trust
-
-
If required - Intellectual property transfers
-
Intellectual property transfers
Business names Most business names are owned by or registered to the underlying entity. Business names can be registered with the Alberta government. Generally, business names are registered for use with sole proprietorships or partnerships which do not have a separate legal existence from their ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Trademark agreement
-
Intellectual property licence agreement
-
Licence of copyright agreement
-
-
Real property transfers
The first step is to identify the property transferred in the purchase agreement and decide whether a transfer is required. If a share transfer is completed, and all underlying property is owned by the company, then a title transfer is not required. Once an agreement has been reached, the property ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Employees
If the business has employees, the buyer may or may not want those employees to continue, and the employees may or may not wish to continue. If the employee has a current contract with the seller, the buyer may have obligations to the employee under the employment contract. This is usually the case ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Domains, websites, email, and social media accounts
The purchase agreement should provide for the transfer of rights to any key domains, websites, email addresses, and social media accounts.
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Franchise agreements
If a franchise agreement is a major component of a sale, the parties should ensure that the agreement and rights attached to it can be transferred to the buyer. The franchisor’s consent may be required. There may be exceptions allowed in certain circumstances, such as in the case of acquisitions of ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Licence agreements
Several key licences may affect the everyday operations of the business. For example, the business could utilize various software or service subscriptions, and these may be licensed from third parties. It should be established early on whether these third parties allow the business to continue to ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Service agreements
If the seller uses key service providers for the business, such as software developers, attorneys, bookkeepers, or delivery companies, the buyer may want to continue to use these services. In some instances, these services will be important to the continuing success and operation of the business. ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Agency and distribution agreements
If the seller maintains an agency or distribution arrangement with any supplier, seller, or service provider, assignment or change of ownership needs to be considered. If the underlying agency or distribution agreement does not prohibit assignment and does not allow the principal to terminate the ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Suppliers and customer contracts
Some businesses may have exclusive arrangements with suppliers or customers. Assignment of these contracts must be considered. In relation to customers, there are additional considerations as customer contracts generally allow customers to terminate the agreement more freely than the business. Even ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Tax obligations
Goods and services tax Alberta does not have a harmonized sales tax. Instead, the federal government charges a 5% goods and services tax (GST). Alberta does not have a provincial sales tax.
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Bank accounts
The authorized signatory for the business bank accounts will usually be updated, and the bank notified as to the change of ownership. The process varies from bank to bank. It is useful to specify the seller’s responsibility in the purchase agreement.
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Insurance
An insurance policy may cover certain business functions, physical property, or intellectual property. For example, the business may have public liability insurance. Before the sale, it is crucial to determine whether the seller can transfer the insurance coverage to the new buyer or if the ...
This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.
-
Library of agreements, assignments, and transfers
-
Transfer of domain name
-
Asset transfer agreement
-
Agreement for sale of personal property
-
Letter to landlord's lawyer seeking assignment of lease
-
Assignment of lease
-
Deed of assignment of agreement
-
Deed of restraint of trade
-
Distribution agreement
-
Option to purchase agreement - Business
-
-
-
E. Signing
-
Letter to seller's lawyer seeking amendments to the agreement
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Letter to client to come and sign agreement
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Letter to seller's lawyer with agreement for exchange
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Letter to seller's lawyer for telephone exchange
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Letter to seller's lawyer with agreement after telephone exchange
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Letter to client following exchange
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F. Mid-transaction
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Conditions precedent
The purchase agreement may provide that conditions need to be met before the sale can be completed. The seller training the buyer is typical, especially for service-based businesses or businesses where complex production methods are used. All transfers such as licences, intellectual property, and ...
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Third-party escrow service
Third-party escrow services can be engaged for closing. This could be a bank, financial institution, or a law firm that acts as the trustee or escrow agent. Typically, the buyer and seller submit their documents and funds to the escrow agent for examination. Funds are released to the seller once ...
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Time for closing
The closing date is specified in the purchase agreement, which follows an established timeline. It is common to have a due diligence period of 60-90 days, which begins either from the execution of the letter of intent or term sheet or the signing of the purchase agreement. After the due ...
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Library of common forms
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Partnerships Act Forms
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Declaration of Address Change
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Declaration of Trade Name
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Personal Property Registry Forms
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Financing Statement - PPSA Security Agreement or Sale of Goods Act
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Search Request for Debtor Name(s), Serial Number(s) and/or Registration Number(s)
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Search Request for Expired/Discharged Registration Number(s)
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Service Alberta Forms
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Bill of Sale (for Vehicle Purchase)
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G. If required - Notices
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Notice to complete
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Notice of termination
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Notice of rescission
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Letter to other side serving notice
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Letter to other side's lawyer serving notice
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Letter to other side's lawyer disputing notice to complete
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H. Closing
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Adjustments
Occasionally the purchase agreement or term sheet stipulates that the purchase price is adjusted after closing to reflect a more accurate estimation of the value of the business. This is useful as some expenses, costs, and liabilities are difficult to ascertain prior to closing. Payment can be ...
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Closing adjustments sheet
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Letter to client requesting cheques and providing closing details
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Direction to pay to incoming lender
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Direction to pay to incoming lender's lawyer
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Order on the escrow agent
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Letter to client with closing figures and account
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I. Finalizing the matter
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Final actions at closing and after closing
Some of the possible actions required of the parties to complete their obligations under the purchase agreement include:
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Letter to client finalizing the matter
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Invoice recital - Purchase of business
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Closing the file
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File closing checklist
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Comments and suggestions for By Lawyers
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Business Structures and the Comparative Table (AB)
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Overview
This commentary assists with the set-up of a new business structure, the acquisition of an existing structure, and the change from one structure to another. It covers each structure in relation to income tax, capital gains tax, asset protection, control and succession, set-up and running costs, and ...
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A. Comparative table
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Comparative table
The below table considers each structure in relation to the following:
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B. The structures
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Sole proprietorship
A sole proprietorship, also known as a sole trader, is the simplest business structure. The business has no separate legal existence or personality from its owner. It is owned and run by one individual who is responsible for all the business debts and liabilities. There are minimal set-up ...
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Partnership
A partnership is a relationship between people carrying on a business in common with a view to making a profit. A minimum of two partners is required to form a partnership, but there is no maximum number of partners. The partnership agreement governs the partnership. All partners have the authority ...
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Corporation
A corporation is a legal entity separate from its shareholder owners. Under the Business Corporations Act RSA 2000, c B-9, the two types of corporations are limited liability corporations and unlimited liability corporations. The liability of the shareholders of a liability corporation is limited ...
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Joint venture
A joint venture is a commercial relationship between two or more entities for a particular undertaking or endeavour to realize mutual commercial gains. Joint ventures are established for a specific purpose. The three types of joint ventures are:
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Trust
A trading trust is where the trustee holds property, incurs liabilities, earns income, and distributes it to the beneficiaries of the trust. The trustee is personally liable unless otherwise agreed with the transaction’s other party. The trust deed normally provides for the trustee to be ...
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Association
Associations are generally not used for business as they protect a committee and members of a group, usually conducting a not-for-profit activity.
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C. Comparing the structures
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Income tax
Income splitting can minimize income tax. This involves moving income from a high-income tax rate entity to a low-income tax rate entity so that the extra income is taxed at a lower rate. It is more difficult for sole proprietors and partners in a partnership to split income than in other business ...
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Capital gains tax (CGT)
Capital gains are added to taxable income for the tax year in which it was incurred. For a capital gain realized before January 1, 2026, one-half of the capital gain is taxed.
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Asset protection
Sole proprietor A sole proprietor is liable to the full extent of their assets.
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Control and succession
Most clients seek to minimize their tax liability, provide for the protection of their assets, and retain full control of their affairs.
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Set-up and running costs
Sole proprietor Set-up and running costs for a sole proprietor are minimal. There are no post-establishment statutory obligations, apart from tax return obligations.
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Flexibility
Sole proprietors and partnerships Sole proprietors and partnerships made up of individuals have no ability to split income with non-principals. However, it is easier for a sole proprietor to convert to other business structures.
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D. Other considerations
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Trust income designation
Section 104(13.1) of the Income Tax Act 1985 permits a trust to designate income paid or payable to a beneficiary as retained by the trust and taxable in the hands of the trust. This is known as the section 104(13.1) designation and is usually used by a Canadian resident trust to offset a ...
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Relationship between entities, names, and trademarks
Many clients believe they have protected a trading name by registering a corporation name, business name, or domain name, however, this is not the case. A business name is merely a name under which a business operates. The purpose of business name registration is to maintain a register of those who ...
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