The Sale Of Business As A Going Concern Agreement is a crucial legal document used in Canadian business acquisitions where an entire operational business is being transferred from one party to another. This comprehensive agreement is essential when the intention is to maintain the business's operational continuity during and after the transfer. It's particularly relevant in scenarios where the business's ongoing operations, employees, customer relationships, and goodwill are as valuable as its physical assets. The document must comply with various Canadian federal and provincial regulations, including tax laws, employment standards, and competition requirements. It typically includes detailed provisions covering asset transfer, employee retention, liability assumption, warranty provisions, and operational continuity requirements. This type of agreement is distinct from asset-only sales as it ensures the business remains functional throughout the transfer process, maintaining its value as an operational entity.
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1. Parties: Identifies and defines the Vendor(s) and Purchaser(s) with full legal names and addresses
2. Background: Provides context about the business, its operations, and the parties' intention to sell/purchase
3. Definitions: Defines key terms used throughout the agreement
4. Sale and Purchase: Core agreement to sell and purchase the business as a going concern
5. Purchase Price: Details of the purchase price, payment terms, and adjustments
6. Conditions Precedent: Conditions that must be satisfied before completion
7. Pre-Completion Obligations: Vendor's obligations in running the business before completion
8. Completion: Details of the completion process, timing, and deliverables
9. Assets: Detailed description of assets included in the sale
10. Assumed Liabilities: Specifies which liabilities the purchaser will assume
11. Employees: Treatment of employees and associated obligations
12. Vendor's Warranties: Warranties given by the vendor about the business
13. Purchaser's Warranties: Warranties given by the purchaser
14. Limitations on Claims: Limitations on warranty claims and indemnities
15. Post-Completion Obligations: Ongoing obligations after completion
16. Confidentiality: Confidentiality obligations of all parties
17. Notices: How formal notices under the agreement must be given
18. General Provisions: Standard boilerplate provisions
19. Governing Law: Specifies Canadian law as governing law and jurisdiction
1. Intellectual Property: Detailed section on IP transfer - required if business has significant IP assets
2. Real Property: Required if business owns or leases real estate
3. Environmental Matters: Required for businesses with environmental impacts or risks
4. Information Technology: Required for technology-dependent businesses
5. Non-Competition: Restrictions on vendor's future competitive activities - optional but common
6. Earn-out Provisions: Required if part of purchase price is based on future performance
7. Tax Matters: Detailed tax provisions - required for complex tax structures
8. Third Party Consents: Required if significant third-party contracts need consent for transfer
9. Transition Services: Required if vendor will provide post-completion services
1. Business Description: Detailed description of the business and its operations
2. Asset Register: Comprehensive list of all assets included in the sale
3. Excluded Assets: List of assets specifically excluded from the sale
4. Financial Statements: Recent financial statements of the business
5. Employee Information: Details of all employees, their terms and conditions
6. Material Contracts: List and copies of all material contracts
7. Intellectual Property Register: Details of all IP owned or used by the business
8. Properties: Details of all owned and leased properties
9. Permitted Encumbrances: List of permitted liens and encumbrances
10. Inventory: Detailed inventory list and valuation
11. Required Consents: List of required third-party consents
12. Completion Deliverables: List of all documents to be delivered at completion
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