The first step is a strategic assessment of structure, timing, risks, and objectives. A preliminary discussion can clarify whether the deal is best pursued as contemplated and what preparation is required before engaging with counterparties or signing an LOI.

In many cases, yes. Non-residents can acquire Canadian businesses, subject to potential tax, regulatory, financing, and investment review considerations.

Cross-border transactions require early planning to address these issues and ensure compliance with applicable Canadian laws.

A holdback or escrow involves retaining a portion of the purchase price for a defined period after closing to secure specific risks, such as breaches of representations and warranties or unresolved issues.

These mechanisms provide buyers with protection while allowing sellers to demonstrate post-closing compliance.

An earn-out is a pricing mechanism where part of the purchase price is contingent on the business achieving defined post-closing performance targets.

Earn-outs can bridge valuation gaps but often give rise to disputes if performance metrics, control rights, reporting obligations, and dispute-resolution mechanisms are not carefully defined.

They’re statements about the business (e.g., taxes, contracts, liabilities). If untrue, the buyer may have remedies—so the drafting and disclosures matter.

It varies. Complexity, consents, financing, and document readiness can change the timeline significantly.

Legal due diligence typically includes a review of corporate records, material contracts, employment matters, intellectual property, litigation, regulatory compliance, real estate interests, privacy considerations, and other areas that affect risk and value.

The scope varies depending on the transaction, but the objective is to identify issues that may affect pricing, structure, deal protections, or post-closing exposure.

A Letter of Intent (LOI) outlines the principal business terms of a proposed transaction and sets the roadmap toward a definitive agreement.

While purchase terms are typically non-binding, certain provisions—such as exclusivity, confidentiality, cost allocation, and governing law—are often legally binding. Careful drafting is required to avoid unintended obligations or disputes over enforceability.

In an asset sale, the buyer purchases specific assets and, in some cases, assumes selected liabilities of the business. The seller retains the corporation and any liabilities not expressly assumed. This structure can allow buyers to limit risk exposure but may require third-party consents and more extensive post-closing transfers.

In a share sale, the buyer acquires the shares of the corporation itself, thereby taking ownership of all assets and liabilities—known and unknown—of the company. This structure is often simpler operationally but places greater emphasis on due diligence, representations and warranties, and indemnities to manage risk.

The appropriate structure depends on tax considerations, liability exposure, contractual constraints, regulatory approvals, and the parties’ relative negotiating leverage.

You are not legally required to retain a lawyer to buy or sell a business in Canada. However, M&A transactions involve complex legal, contractual, and risk-allocation issues that can have long-term financial and operational consequences.

An experienced M&A lawyer helps structure the transaction, manage legal risk, conduct due diligence, negotiate key terms, and ensure the deal closes properly with appropriate post-closing protections in place. In practice, most buyers and sellers retain legal counsel to avoid exposure that may not be apparent at the outset.