Business Asset Purchase Agreement for Canada

Business Asset Purchase Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that documents the purchase and sale of business assets between a seller and buyer. This agreement details the specific assets being transferred, purchase price, payment terms, representations and warranties, conditions of closing, and post-closing obligations. It incorporates Canadian federal and provincial regulatory requirements, including tax considerations, employment laws, and industry-specific regulations. The document addresses liability allocation, indemnification provisions, and includes necessary schedules detailing the assets, contracts, and other critical transaction elements.

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What is a Business Asset Purchase Agreement?

The Business Asset Purchase Agreement is a crucial document used in Canadian business transactions when a buyer wishes to acquire specific assets of a business rather than shares of the company. This approach allows buyers to select specific assets and exclude unwanted liabilities, making it particularly attractive for strategic acquisitions. The agreement must comply with Canadian federal laws and relevant provincial regulations, including tax legislation, employment standards, and industry-specific requirements. It typically includes detailed schedules of assets, price allocation, representations and warranties, and may require various third-party consents. This document is essential for protecting both parties' interests and ensuring a clear understanding of what is being transferred, excluded, and any ongoing obligations post-closing.

What sections should be included in a Business Asset Purchase Agreement?

1. Parties: Identifies and provides full legal details of the buyer and seller

2. Background: Recitals explaining the context of the transaction and business being sold

3. Definitions: Comprehensive list of defined terms used throughout the agreement

4. Purchase and Sale: Core transaction terms including assets being purchased and excluded assets

5. Purchase Price: Details of consideration, payment terms, and purchase price adjustments

6. Closing: Closing mechanics, conditions precedent, and timing

7. Representations and Warranties: Seller's and buyer's representations regarding the business, assets, and authority to enter agreement

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

9. Indemnification: Terms for indemnification and liability allocation between parties

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

11. General Provisions: Standard boilerplate clauses including governing law, notices, assignment, etc.

12. Execution: Signature blocks and execution details

What sections are optional to include in a Business Asset Purchase Agreement?

1. Employee Matters: Include when employees are being transferred or when specific employee arrangements need to be addressed

2. Real Estate: Include when real property is part of the assets being purchased

3. Intellectual Property: Include when IP assets are significant part of the purchase

4. Environmental Matters: Include when business involves environmental risks or compliance requirements

5. Tax Matters: Include when complex tax structuring or specific tax elections are required

6. Transition Services: Include when seller will provide post-closing operational support

7. Non-Competition: Include when restrictions on seller's future business activities are required

8. Third Party Consents: Include when significant third party approvals are needed

What schedules should be included in a Business Asset Purchase Agreement?

1. Schedule A - Purchased Assets: Detailed list of all assets being purchased

2. Schedule B - Excluded Assets: Detailed list of assets explicitly excluded from the purchase

3. Schedule C - Assumed Liabilities: List of liabilities buyer is assuming

4. Schedule D - Purchase Price Allocation: Breakdown of purchase price allocation across asset categories

5. Schedule E - Contracts: List of material contracts being assigned

6. Schedule F - Intellectual Property: Details of IP assets being transferred

7. Schedule G - Real Property: Details of any real estate included in the sale

8. Schedule H - Employee Information: List of employees and employment terms

9. Schedule I - Required Consents: List of required third party consents

10. Schedule J - Closing Documents: List of documents 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

Manufacturing

Retail

Technology

Professional Services

Healthcare

Real Estate

Construction

Hospitality

Transportation

Energy

Agriculture

Mining

Communications

Financial Services

Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Tax

Operations

Risk Management

Compliance

Due Diligence

Integration

Strategy

Business Development

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Lawyer

Business Development Director

Mergers & Acquisitions Manager

Chief Operating Officer

Finance Director

Tax Director

Corporate Secretary

Risk Manager

Operations Manager

Asset Manager

Due Diligence Specialist

Integration Manager

Compliance Officer

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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