Bulk Sales Agreement for Canada

Bulk Sales Agreement Template for Canada

A comprehensive commercial agreement governed by Canadian law that facilitates the sale of a substantial portion of a business's assets or inventory in bulk. The agreement ensures compliance with provincial and federal regulations, including any applicable provincial bulk sales legislation, tax requirements, and commercial laws. It provides detailed terms for the transfer of assets, payment mechanisms, representations and warranties, and closing conditions, while protecting both buyer and seller interests in large-scale asset transfers.

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What is a Bulk Sales Agreement?

The Bulk Sales Agreement is a specialized commercial contract used when a business intends to sell all or a substantial portion of its inventory or assets outside the ordinary course of business. While some Canadian provinces have repealed their bulk sales legislation (such as Ontario in 2017), this agreement remains crucial for ensuring proper transfer of assets, protection of creditor interests, and compliance with remaining provincial bulk sales laws where applicable. The document typically includes comprehensive details about the assets being transferred, purchase price and payment terms, representations and warranties, closing conditions, and tax considerations. It's particularly important for protecting purchasers from potential creditor claims and ensuring sellers receive proper value for their assets while complying with all regulatory requirements.

What sections should be included in a Bulk Sales Agreement?

1. Parties: Identification of the seller and purchaser, including full legal names and addresses

2. Background: Context of the sale, nature of the seller's business, and general purpose of the transaction

3. Definitions: Defined terms used throughout the agreement, including 'Assets', 'Closing Date', 'Purchase Price', etc.

4. Purchase and Sale: Core transaction terms, including description of assets being sold and purchase price

5. Purchase Price and Payment: Detailed payment terms, including any adjustments, deposits, and payment mechanics

6. Closing: Closing date, location, and mechanics of the closing process

7. Seller's Representations and Warranties: Standard representations about ownership, authority to sell, condition of assets, etc.

8. Purchaser's Representations and Warranties: Representations about authority to purchase, financing availability, etc.

9. Conditions Precedent: Conditions that must be met before closing, including regulatory approvals

10. Covenants: Pre-closing and post-closing obligations of both parties

11. Tax Matters: Treatment of tax liabilities, clearances, and allocations

12. Termination: Circumstances under which agreement can be terminated and consequences

13. General Provisions: Standard boilerplate provisions including governing law, notices, etc.

What sections are optional to include in a Bulk Sales Agreement?

1. Employee Matters: Include when employees are being transferred or when employment obligations need to be addressed

2. Intellectual Property: Include when IP assets are part of the bulk sale

3. Environmental Matters: Include when the assets include real property or environmental liabilities

4. Transition Services: Include when seller will provide post-closing transition support

5. Non-Competition: Include when restricting seller's future business activities

6. Bulk Sales Compliance: Include specific provisions for provinces where Bulk Sales Acts are still in effect

7. Real Property: Include when real estate assets are part of the sale

What schedules should be included in a Bulk Sales Agreement?

1. Schedule A - Asset List: Detailed inventory of all assets included in the sale

2. Schedule B - Excluded Assets: List of assets specifically excluded from the sale

3. Schedule C - Purchase Price Allocation: Breakdown of purchase price across asset categories for tax purposes

4. Schedule D - Assumed Contracts: List of contracts being assumed by the purchaser

5. Schedule E - Permitted Encumbrances: List of permitted liens or encumbrances on the assets

6. Schedule F - Required Consents: List of third-party consents required for closing

7. Appendix 1 - Form of Bill of Sale: Form of transfer document for closing

8. Appendix 2 - Form of Legal Opinion: Form of legal opinion to be delivered at closing

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use
Clauses
Relevant Industries

Retail

Manufacturing

Wholesale Distribution

Industrial

Agriculture

Food and Beverage

Automotive

Construction

Mining

Textiles

Consumer Goods

Electronics

Warehouse and Logistics

Relevant Teams

Legal

Finance

Operations

Procurement

Risk Management

Corporate Development

Mergers & Acquisitions

Treasury

Tax

Compliance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Commercial Director

Head of Mergers & Acquisitions

Corporate Development Manager

Business Development Director

Asset Manager

Operations Director

Finance Manager

Legal Counsel

Procurement Manager

Risk Manager

Treasury Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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