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Purchase and Sale of Business Disputes

In Canada, businesses are purchased or sold in two (2) forms – an asset sale or a share sale.

An asset deal involves the sale of all or part of the company’s property interests. It allows the Vendor and Purchaser to negotiate which assets and liabilities [if any] will be transferred.

A share sale involves a sale of 100% of the equity in the company and results in all of the assets and liabilities attaching thereto. So the difference lies in whether the purchaser is acquiring the property of the company directly or is this accomplished indirectly via ownership of the actual company or some stake thereof.  There are also significant tax differences associated with the different forms of purchases, and you would be best to consult a lawyer to determine what form makes the most sense for you.

Any disputes that arise during the purchase or sale of a business could be addressed in a number of ways. The initial concern should be to see any dispute resolution provisions in any agreements that may have been entered into by both parties for the purpose of the sale of the business in question. If no such agreements or provisions exist, there are options available beyond the court system.