Business Acquisition Agreement Template for Canada

A Business Acquisition Agreement is a legally binding contract that sets out the terms and conditions for buying a company or its assets in Canada. It spells out exactly what's being purchased - from physical assets and equipment to intellectual property, customer lists, and ongoing contracts.

This agreement protects both buyers and sellers by clearly defining the purchase price, payment terms, and what happens after closing. It includes crucial details about representations and warranties, conditions for closing the deal, and how to handle potential disputes under Canadian commercial law. Most deals over $1 million require review under the Competition Act and Investment Canada Act.

Use a Business Acquisition Agreement any time you're planning to buy or sell a business in Canada, even for seemingly straightforward transactions. This agreement becomes essential when purchasing shares, assets, or intellectual property from another company - particularly when the deal value exceeds $93 million, triggering mandatory Competition Bureau review.

The agreement protects both parties during complex negotiations involving multiple stakeholders, earnout provisions, or regulatory approvals. It's especially important when dealing with cross-border transactions, asset transfers requiring third-party consent, or purchases involving significant employee transitions or ongoing business relationships between buyer and seller.

• Company Acquisition Agreement: The most comprehensive version, covering full business purchases including assets, shares, and operational control
• Asset Purchase Letter of Intent: Focuses specifically on buying selected business assets rather than the entire company
• Business Acquisition Term Sheet: Outlines key deal terms and conditions before drafting the full agreement
• Business Acquisition Letter of Intent: Sets preliminary terms for negotiating a complete business purchase
• Acquisition Letter of Intent: A simpler version for straightforward business purchases with standard terms

• Business Owners and Executives: The primary decision-makers who negotiate and sign the Business Acquisition Agreement, representing both buyer and seller companies
• Corporate Lawyers: Draft and review the agreement, ensure compliance with Canadian business laws, and protect their clients' interests
• Investment Bankers: Help structure the deal terms and facilitate negotiations between parties
• Accountants and Tax Advisors: Review financial terms and tax implications of the transaction
• Regulatory Bodies: Including the Competition Bureau and Investment Canada, who may need to approve larger transactions
• Due Diligence Teams: Verify claims and representations made in the agreement about the business being sold

• Business Details: Gather complete legal names, addresses, and registration numbers for all parties involved
• Asset List: Create detailed inventory of all assets, intellectual property, contracts, and liabilities being transferred
• Financial Information: Compile purchase price, payment terms, working capital adjustments, and earnout structures
• Due Diligence: Review financial statements, contracts, employee agreements, and regulatory compliance records
• Deal Structure: Determine if it's an asset or share purchase, including tax implications
• Regulatory Requirements: Check Competition Act thresholds and Investment Canada Act obligations
• Template Selection: Use our platform to generate a customized agreement that includes all required elements for Canadian law

• Party Information: Full legal names, addresses, and registration details of buyer and seller
• Purchase Terms: Clear description of assets or shares being acquired, purchase price, and payment structure
• Representations & Warranties: Statements about business condition, ownership, and liabilities
• Closing Conditions: Required approvals, consents, and documentation for deal completion
• Indemnification: Protection against future claims and allocation of risks
• Non-Competition: Restrictions on seller's future business activities
• Governing Law: Specification of Canadian jurisdiction and dispute resolution procedures
• Schedules: Detailed lists of assets, contracts, employees, and liabilities

A Business Acquisition Agreement differs significantly from a Business Purchase Agreement in several key aspects, though they're often confused. While both deal with business transactions, their scope and application vary considerably under Canadian law.

• Scope and Complexity: Business Acquisition Agreements typically cover more complex transactions, including shares, intellectual property, and ongoing operations, while Business Purchase Agreements often focus on simpler asset transfers
• Regulatory Requirements: Acquisition agreements usually trigger Competition Act reviews and Investment Canada Act considerations for larger deals; purchase agreements rarely do
• Post-Closing Obligations: Acquisition agreements include detailed provisions for transition periods, employee retention, and knowledge transfer; purchase agreements generally end at closing
• Due Diligence Requirements: Acquisition agreements demand extensive corporate due diligence and warranties; purchase agreements focus mainly on asset verification and title transfer