In Ontario’s fast-paced business world, corporate takeovers are becoming a more popular growth strategy among entrepreneurs and investors. One key legal tool in these processes is the Share Purchase Agreement (SPA), a legally enforceable document controlling the conditions of acquiring shares in a company. It provides that the acquirer receives ownership of the corporation, its rights, obligations, liabilities, and assets, while offering the vendor protections and exit guarantees.
Whether you’re a seasoned investor in Toronto’s downtown or a new buyer probing into a business venture in Mississauga, it’s essential to know how to write a Share Purchase Agreement to protect your investment, reduce risk, and be legally compliant. Inadequately written SPAs can result in lawsuits, broken deals, or unexpected liabilities that could otherwise be avoided through proper due diligence and astute legal consultation.
This article gives a detailed guide to preparing a Share Purchase Agreement in Ontario. It explains the agreement’s essential elements, regulatory environment, due diligence process, typical pitfalls, and legal best practices reinforced by Ontario case law and statutory citations.
What Is A Share Purchase Agreement?
A Share Purchase Agreement (SPA) is a comprehensive legal contract that governs the acquisition of shares in a corporation, representing one of the most critical documents in Ontario’s business transaction landscape. Unlike asset purchase agreements where only specific assets and liabilities are transferred, an SPA transfers complete ownership of the corporate entity itself, including all rights, obligations, assets, and liabilities.
When you execute a share purchase agreement in Ontario, you acquire complete corporate ownership including voting rights, dividend entitlements, rights to corporate assets upon dissolution, and responsibility for all existing corporate liabilities and continuing obligations. The fundamental advantage lies in business continuity – existing contracts, employment relationships, licenses, permits, and goodwill remain intact without requiring individual assignments or third-party consents. This guide explains what an SPA is, the steps to draft one, key clauses (with relevant Ontario case law), how share purchases differ from asset purchases, the legal framework in Ontario, and common mistakes to avoid.
Step-By-Step Process For Writing A Share Purchase Agreement In Ontario
Step 1: Initial Planning and Strategic Assessment
Before drafting begins, parties must decide whether a share purchase structure serves their objectives better than an asset purchase. This decision impacts the entire agreement structure, risk allocation, and tax implications.
Share purchase structures work best when business continuity, established customer relationships, and existing regulatory approvals are valuable. They simplify the transaction by avoiding extensive contract assignments but expose buyers to all corporate liabilities. Successful SPA drafting requires a coordinated team including corporate lawyers, tax advisors, financial advisors, and industry specialists. In Ontario’s competitive M&A market, experienced legal counsel familiar with the Ontario Business Corporations Act and Securities Act requirements are essential.
Step 2: Draft Letter of Intent (LOI)
Most transactions begin with a non-binding Letter of Intent outlining key commercial terms. The LOI establishes the foundation for SPA negotiations and typically includes purchase price ranges, transaction structure, due diligence timelines, and exclusivity periods. It’s usually a brief document where the buyer and seller record the main agreed-upon terms of the deal. Key elements of LOIs include:
- Identification of Parties and Target Company: The LOI specifies the names of the purchaser, the vendor, and the target corporation whose shares are proposed to be acquired.
- Proposed Transaction Structure: It clarifies the nature of the transaction, usually a share purchase, and identifies the class and number of shares to be transferred.
- Purchase Price and Payment Terms: The LOI sets out the proposed purchase price, including any adjustments, and explains how the price will be paid, such as by cash at closing, through escrow, or by deferred installments.
- Valuation Assumptions: It records the basis upon which the purchase price has been calculated, for example, assumptions regarding the working capital or financial position of the corporation.
- Proposed Definitive Agreement: The LOI notes that a full SPA will be drafted following execution of the LOI, incorporating the terms outlined and including customary provisions such as representations, warranties, covenants, indemnities, and closing conditions.
- Conditions Precedent: The LOI outlines the conditions that must be satisfied before the transaction can close, including completion of due diligence, regulatory and shareholder approvals, financing, and the absence of any material adverse change.
- Due Diligence: The LOI grants the purchaser access to the corporation’s records, contracts, financial statements, and legal documents, allowing for a thorough review of legal, financial, tax, employment, intellectual property, and regulatory matters.
- Employment and Vendor Covenants: It may include expectations regarding the continued employment of key employees and require the vendor to operate the business in the ordinary course until the closing date.
- Exclusivity: The LOI often provides that, for a fixed period, the vendor will not solicit or negotiate offers with any third parties, ensuring that the purchaser has an exclusive right to pursue the transaction.
- Termination and Expiry: The LOI states when and how it will terminate, such as upon execution of the SPA, by mutual agreement, or at the end of a specified time period.
- Governing Law: It identifies the governing jurisdiction, often Ontario law, under which the LOI will be interpreted.
- Confidentiality: The LOI reiterates the obligation of both parties to maintain confidentiality over the negotiations and exchanged information, usually by reference to a previously signed non-disclosure agreement.
- Costs and Expenses: The LOI typically provides that each party will bear its own transaction-related costs, such as legal and accounting fees.
- Binding and Non-Binding Provisions: Finally, the LOI makes clear which provisions are binding usually confidentiality, exclusivity, and costs and which commercial terms are non-binding until incorporated into the SPA.
Wallace v. Allen, 2007 CanLII 8935 (ON SC)
The plaintiff and defendant, who were friends, negotiated the sale of the defendant’s business interests. On September 24, 2004, they executed a Letter of Intent (LOI) providing that a binding agreement would be finalized within 40 days. The parties subsequently agreed on terms and prepared a draft Share Purchase Agreement (SPA) for execution at closing. However, the plaintiff was not ready, willing, or able to close on December 29, 2004. The defendant then asserted that no binding agreement had come into existence.
While the draft SPA contained all essential terms and was finalized on December 22, 2004, the court found that the parties did not intend to be bound until the agreement was signed. The court found that neither the LOI nor the draft SPA constituted a binding agreement.
Step 3: Non-disclosure agreement/ Confidentiality
LOIs are usually non-binding. During the LOI stage, confidentiality clauses thus preserve trust between the parties and reduce the risk of sensitive data being misused, even if the deal never proceeds to a Share Purchase Agreement. The LOI itself may contain a dedicated confidentiality provision, or the parties may execute a separate stand-alone NDA. The scope usually covers financial statements, contracts, customer lists, employee information, intellectual property details, and any other proprietary data. The covenant restricts the receiving party from using the information for any purpose other than evaluating the proposed transaction and prohibits disclosure to anyone except advisors who need to know for that purpose.
Step 4: Comprehensive Due Diligence Process
Once an LOI or basic agreement in principle is in place, the buyer will conduct due diligence. Due diligence is the process of carefully investigating the target company’s affairs legal, financial, and operational – to uncover any issues or risks before finalizing the purchase. A thorough due diligence in Ontario typically includes:
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- Financial Due Diligence: Reviewing financial statements (balance sheets, profit/loss statements), audit reports, tax returns (usually for the past 3-5 years), and other records to verify the company’s financial health. The buyer looks for issues like irregular revenues, undisclosed debt, or tax liabilities.
- Legal Due Diligence: Examining the company’s legal documents and compliance status. This includes reviewing the incorporation documents, bylaws, and minute books to ensure the company is duly organized and in good standing. It also involves checking material contracts (customer contracts, supplier agreements, leases, loan agreements) for change-of-control clauses, searching for any lawsuits or liens against the company, and reviewing any encumbrances whether entrusted or not along with pledges.
- Employment and HR Due Diligence: Reviewing employee contracts, benefit plans, pension obligations, and any severance or termination liabilities. Ontario’s Employment Standards Act, 2000 provides that employment continues uninterrupted in a share sale (the employer is the same entity), meaning the buyer will take on employees with their full length of service and accrued rights.
- Intellectual Property (IP) Due Diligence: Ensuring that the target company owns its intellectual property – patents, trademarks, copyrights, trade secrets, software, etc. The buyer will check IP registrations and any licensing agreements.
- Regulatory Due Diligence: Checking if any regulatory approvals are needed for the transaction (for example, sector-specific approvals if the business is in a regulated industry like finance or healthcare). Also, if the company deals with personal data, ensuring compliance with privacy laws, etc.
Atlantic Financial Corp. v. Henderson, 2007 CanLII 15230 (ON SC)
The defendants sold their 25% shares in a bar and restaurant business to the plaintiff for $15,000 each. Shortly after the sale, the business closed. The plaintiff alleged that the defendants failed to disclose the company’s insolvency, unpaid wages, and debts, and further breached post-closing obligations by not providing documents on time. The plaintiff sought rescission and repayment of the purchase price. The court found that the defendants had disclosed the business’s poor financial state before the sale and that the plaintiff, an experienced businessman, understood these risks. The allegation of fraud by non-disclosure was not proven. This case highlights the importance of due diligence.
Step 5: Drafting the Share Purchase Agreement:
The buyer’s lawyer prepares the first draft generally. However, this can be negotiated. The drafting process involves translating the business deal into legal language, covering all essential terms: the purchase price, number and class of shares being sold, representations and warranties, covenants, conditions precedent, closing deliverables, indemnification provisions, and so on. Key terms must be defined with utmost care to ensure the SPA aligns with Ontario law.
Step 6: Negotiation and Review:
Once the initial SPA draft is circulated, both sides review it and engage in negotiations to resolve any disagreements on the wording or inclusion of terms. This often involves exchanging markups or revisions. For example, the seller might object to certain representations as too broad, or the buyer might insist on a higher holdback amount for indemnity. This step can involve intense negotiation on key clauses like representations & warranties, indemnities, non-compete covenants, and any conditional aspects of the deal.
Step 7: Signing the Agreement:
Once the SPA text is finalized, the parties proceed to sign the agreement. At signing, the SPA becomes a signed contract, but often the closing is scheduled for a future date to allow time for any outstanding conditions to be met. In many transactions, the SPA is signed and then there’s an interim period before closing to obtain necessary approvals and prepare for handover. During this interim period, the SPA typically restrains the seller from making any major changes to the business and obligates both parties to fulfil the conditions required for closing.
Step 8: Fulfilment of Conditions Precedent:
After signing and before closing, each party works to satisfy the conditions precedent listed in the SPA. For example, if the SPA requires regulatory approval or a third-party consent, this period is when the parties secure those. Other typical actions are obtaining any required shareholder or board approvals, finalizing financing arrangements for the purchase price, and the seller preparing closing financial statements or certificates. Both sides’ lawyers usually prepare the closing documents during this time as well.
Step 9: Closing:
Closing is the moment when the transaction is completed. Typically, at closing, the buyer pays the purchase price and the seller delivers the share certificates to the buyer, along with any other deliverables (like corporate records, keys to premises, etc.). Essentially, ownership of the Shares transfers on the closing date.
Step 10: Post-Closing Activities:
Even after the deal is closed, there are some important post-closing steps. These include updating government filings and registers; for example, updating the corporation’s share register and minute book to reflect the new ownership, filing any required notices of change with regulatory bodies, and notifying the Canada Revenue Agency (CRA) if needed. The buyer will also integrate the acquired business into its operations. If the SPA includes any post-closing covenants (such as the seller agreeing to assist with transition or train the buyer, or the buyer agreeing to retain the seller’s key employees for a period), those will be carried out after closing.
Key Clauses In A Share Purchase Agreement
A Share Purchase Agreement contains many clauses and sections, each serving a specific purpose in allocating rights and risks between the buyer and seller. Below, we outline the key clauses commonly found in Ontario SPAs, explain what they mean in layman’s terms, and provide examples (including references to Ontario case law where relevant) to illustrate their importance.
1. Parties and Definitions
Every SPA starts by clearly identifying the parties involved. This means naming the buyer (or buyers) and seller (or sellers), along with any other parties to the agreement such as guarantors (e.g. if a parent company or individual is guaranteeing obligations) or the target company itself if it’s making certain promises.
The SPA also typically contains a Definitions section. This is where key terms used throughout the agreement are defined in one place to avoid ambiguity. For instance, terms like “Closing Date,” “Business Day,” “Material Adverse Effect,” or “Knowledge of the Seller” might be defined here.
2. Purchase Price and Payment Terms
One of the most fundamental terms of the SPA is the purchase price how much the buyer will pay for the shares and how and when that payment will be made. The agreement will state the total price (in Canadian dollars, unless another currency is agreed) and the mechanism of payment. Sometimes the price is a fixed amount; other times it might be subject to adjustments. Common price-related provisions include:
- Deposit or Down Payment: In some deals, the buyer might pay a deposit upon signing the SPA or LOI, which is credited against the purchase price at closing.
- Adjustments to Purchase Price: Many SPAs include adjustments based on the company’s financial condition at closing. For example, the SPA might set a target working capital, and if the actual working capital of the company at closing is higher or lower than the target, the price is adjusted upward or downward accordingly.
- Payment Structure: Will the price be paid in a lump sum at closing, or in installments. If an earn-out is involved (where part of the price is contingent on the business achieving certain targets post-closing), the earn-out terms are detailed.
- Escrow or Holdback: Often, the parties agree that a portion of the purchase price will be held back in escrow for a certain period after closing. For example, 10% of the price might be held in a trust account for 18 months to cover any indemnity claims by the buyer. If no claims arise, the money is released to the seller at the end of the period.
- Shares or Cash: Occasionally, deals may involve payment in shares of the buyer’s company (share-for-share transactions) or other assets. But in most private acquisitions in Ontario, payment is in cash. If shares of the buyer are involved, the SPA will include details on share exchange ratios and perhaps a shareholders’ agreement for the seller joining the buyer’s company as a shareholder.
One Ontario case underlines the importance of agreeing on price and payment clearly:
Frye v. Sylvestre, 2023 ONCA 796.
In that case, an alleged share purchase deal fell apart because key terms like the exact price and payment method were never finalized in writing, so the court held there was no binding SPA at all. This emphasizes that completeness and clarity on price (and other material terms) are critical to make the contact enforceable.
3. Conditions Precedent (Closing Conditions)
Conditions precedent are the requirements that must be satisfied before the transaction can close. They are basically the “to-do list” or contingencies that, if not fulfilled (or waived), allow a party to back out of the deal without penalty. The SPA will list conditions for the buyer’s benefit, the seller’s benefit, or mutual conditions. Common closing conditions in an Ontario SPA include:
- Regulatory Approvals: If the transaction triggers any regulatory oversight, those approvals must be obtained. For example, if the businesses are large, the deal might require clearance under the Competition Act (Canada) (the Canadian anti-trust law) if certain size thresholds are exceeded.
- Third-Party Consents: While share deals usually avoid needing many consents, there are exceptions. If key contracts of the company have change of control clauses (e.g., a client contract that allows termination if the company is sold, or a lease that requires landlord consent to a change in majority ownership), the SPA may require that these third-party consents are obtained before closing.
- Shareholder/Board Approval: The selling company (if it’s the company itself selling treasury shares, or if multiple shareholders are selling) might need corporate approvals.
- No Material Adverse Change: It’s common for the buyer to insist that between signing and closing, no material adverse event occurs in the business. This clause protects the buyer from being forced to close if the target suffers a significant loss during the interim period.
- Legal Documentation and Deliverables: Conditions often include that all documents required for closing are ready and are satisfactory to the parties. For instance, the seller might need to deliver share certificates or a resignation letter from the company’s director, etc., as a condition.
If any of the condition precedents are not met by the closing date, the SPA usually allows that party to terminate the agreement without liability. For example, if a required regulatory approval is denied, both parties can walk away.
Gordon Leaseholds Ltd. v. Metzger [1967] 1 O.R. 580-587
The plaintiff agreed to purchase all outstanding shares of a private company from the defendant for a total purchase price of $2,261,200. The agreement was expressly conditional upon the purchaser’s solicitors providing a favourable opinion regarding the vendor’s title to the shares and the company’s assets. It was observed that when a contract says one party’s obligations depend on the opinion or approval of a third person, that third person’s opinion becomes the deciding factor. The opinion does not need to be reasonable; it only needs to be genuine and honestly held.
4. Representations and Warranties
Representations and warranties are a critical part of any SPA. In this section, the seller (makes a series of statements about the company and the transaction, which are asserted to be true. These statements cover all important aspects of the company’s condition. The purpose is to allocate risk: the seller assures the buyer of certain facts, and if those facts turn out false, the buyer may have recourse.
Common seller representations and warranties in an Ontario SPA include statements about corporate status, shares, financial statements, taxes etc.
5. Indemnification
The indemnification clause is a mechanism that addresses what happens if a representation is false or if certain liabilities arise after closing. To “indemnify” essentially means to compensate or reimburse someone for a loss. In the context of an SPA, an indemnification clause typically says that the seller will indemnify the buyer for losses resulting from breaches of the seller’s representations, warranties, or covenants in the agreement, as well as for certain pre-closing liabilities (like undisclosed tax debts or lawsuits that originate before closing).
Boliden Mineral AB v. FQM Kevitsa Sweden Holdings AB, 2023 ONCA 105
The Ontario Court of Appeal upheld a broad indemnity which required the seller to cover unexpected tax liabilities of the target company even for a post-closing period, because those taxes arose from a breach of the seller’s representations. In that deal, the seller had assured there were no grounds for tax reassessment, which turned out to be untrue. The indemnity was triggered, and because the contract defined “Losses” to include taxes and any foreseeable consequence of a breach, the buyer was indemnified for taxes that hit the company after closing (due to pre-closing issues). This case shows that Ontario courts will enforce the precise terms of a negotiated indemnity clause. For a client, this means well-crafted indemnity language is a powerful tool and underscores why a seller needs to be very cautious about what promises they make.
6. Covenants (Pre- and Post-Closing Obligations)
Covenants are promises to do or not do certain things. In an SPA, both parties may have covenants that apply between signing and closing, and sometimes covenants that apply after closing as well.
7. Confidentiality
The confidentiality clause is usually drafted as a covenant, but the parties may also agree to put it as a separate clause. Its purpose is to protect sensitive business, financial, and operational information that the purchaser receives during due diligence and throughout the negotiation of the transaction. Where the parties have already entered into a non-disclosure agreement at the letter of intent stage, the SPA often incorporates that earlier agreement by reference, confirming that those obligations survive and continue in full force after closing.
8. Governing Law and Dispute Resolution
Because an SPA is a legal contract, it should specify which jurisdiction’s laws govern it and how disputes will be resolved. In Ontario deals, the SPA almost always includes a governing law clause stating that the agreement is governed by the laws of Ontario (and/or Canada, as applicable). This is important for certainty- if any conflict or interpretation issue arises, everyone knows which legal rules to apply.
Alongside governing law, the SPA may specify the forum for resolving disputes (jurisdiction and venue). Alternatively, many SPAs include an arbitration clause as the dispute resolution mechanism.
Inline Fiberglass Ltd. v. Resins Systems Inc., 2007 CanLII 44176 (ON SC)
The Ontario Superior Court of Justice considered whether Ontario had jurisdiction over claims arising out of both confidentiality agreements and a share purchase agreement. Inline Fiberglass Ltd., an Ontario corporation, alleged that Resins Systems Inc. a Barbados subsidiary of RS, had breached a SPA under which it had agreed to purchase ten percent of shares in a Serbian company for one million dollars, of which only four hundred thousand dollars was paid. Inline commenced proceedings in Ontario seeking damages.
The court held that Ontario did have jurisdiction simpliciter. The claims had a real and substantial connection to Ontario since the plaintiff’s operations were based there, the agreements had been executed there, and the alleged damages were sustained in Ontario. The decision confirms that forum selection clauses will generally be enforced but also underscores that courts retain discretion to consolidate related disputes in the forum with the closest overall connection to the issues.
Spa Vs. Asset Purchase Agreement
Share Purchase Agreement: An SPA transfers ownership of the entire corporation, including all assets, liabilities, contracts, licenses, and goodwill, without individual assignments. It ensures seamless business continuity but exposes the buyer to unknown or contingent liabilities. Typical buyers include strategic acquirers seeking to preserve existing regulatory approvals and contract relationships.
Asset Purchase Agreement: An asset purchase allows buyers to choose among specific assets and assume designated liabilities only. Buyers negotiate new contracts for assets like IP, equipment, or customer agreements, requiring consents and assignments. This structure offers superior risk mitigation but entails increased transactional complexity and potential operational disruption.
Key Distinctions:
An SPA demands minimal third-party consents and preserves existing licences and contracts intact. An asset purchase necessitates granular consent-gathering from customers, suppliers, and licensors. Tax treatment also differs: share purchases are generally treated as capital property transactions, whereas asset purchases trigger immediate recapture of depreciation and potential business-asset rollovers under section 85 of the Income Tax Act.
Also Read: Asset Purchase vs Share Purchase: A Comprehensive Analysis
Common Mistakes To Avoid
1. Failure to Define Key Terms: Vague definitions of terms like “Material Adverse Effect” or “Working Capital” can lead to protracted disputes. In Frye v. Sylvestre, the Court of Appeal held that absence of agreed essential terms (price, method) prevented formation of a binding SPA.
2. Incomplete Disclosure Schedules: Omitting schedules or failing to detail exceptions to representations and warranties exposes vendors to unlimited liability. Comprehensive schedules with cross-references to supporting documents are essential.
3. Overly Broad Indemnities: Including indemnification provisions without clear caps, thresholds, or survival periods risks indefinite liability. Ontario law requires specificity for indemnities to be enforced.
4. Unreasonable Restrictive Covenants: Drafting non-compete clauses that span excessively broad territories or timelines leads to unenforceability. Courts enforce only covenants that are no broader than necessary to protect legitimate business interests.
5. Neglecting Tax and Regulatory Approvals: Failing to secure necessary Competition Bureau filings, Investment Canada clearance, or CRA tax clearance certificates can derail closing. Buyers should build in sufficient time for these approvals and include termination rights if approvals are not obtained.
6. Ignoring Post-Closing Integration: Omitting post-closing covenants on employee retention, contract assignments, and system integration can undermine transaction value. Detailed post-closing plans should be incorporated into the SPA to ensure smooth transition.
Illustration:
If the buyer wants to purchase a software development business in Mississauga for its own proprietary codebase and engineering staff, a share purchase enables the buyer to inherit existing software licenses, development contracts, and employee relationships. With an asset purchase, however, there is re-negotiation of separate contracts and re-employment of employees under new contracts.
Key Statutes Regulating Share Purchases in Ontario
- Ontario Business Corporations Act (OBCA)- Regulates issuance of shares, corporate administration, and books.
- Securities Act (Ontario)– Applies in case of public share transactions or private placements.
- Competition Act (Canada)-Big deals are subject to review if thresholds are crossed.
- Employment Standards Act, 2000- Purchaser takes over employment commitments unless otherwise negotiated.
- Arbitration Act, 1991 – Applies to arbitration clauses contained in the SPA.
Conclusion
Preparing a Share Purchase Agreement in Ontario is an advanced legal task that involves detail, forward thinking, and knowledge of statutory and common law. A defective SPA may leave you vulnerable to enormous financial, legal, and reputational consequences.
In conclusion, a good SPA should:
- Evidently establish parties, price, and payment terms,
- Contain detailed representations and warranties,
- Consider and manage risks through indemnities and restrictive covenants,
- Be based on thorough due diligence
- Meet Ontario legislation and provide adequate mechanisms for dispute resolution.
Do You Need to Write or Review a Share Purchase Agreement in Ontario?
At Pacific Legal, our legal team assists clients through each phase of the transaction from negotiating the first time through to post-closing compliance. Regardless of whether you’re buying a small local company or a multinational subsidiary, we can help support strategic and legally sound transaction planning.
Call Pacific Legal today or book a consultation to arrange a meeting with one of Ontario’s corporate lawyers.
FAQs
1. What are the pros and cons of a share purchase agreement?
A share purchase deal passes on title of the whole company, including assets, liabilities, and contracts, supporting continuity in business. Advantages include easier contract assignments and maintenance of reputation. Disadvantages are taking on all liabilities and continuing obligations, which can add risk to the buyer.
2. What is the difference between STA and SPA?
SPA (Share Purchase Agreement) involves buying shares and therefore ownership of the entire entity, including liabilities and contracts. STA (Share Transfer Agreement) generally refers more narrowly to the legal document facilitating the transfer of shares between parties. SPA is broader, covering detailed terms and conditions of the acquisition.
3. Can you transfer shares without an agreement?
Technically, shares cannot be legally transferred without a written agreement that documents the terms of the transfer. An SPA or equivalent agreement protects the parties by outlining conditions, representations, warranties, and liabilities, and is necessary to ensure enforceability and clarity.
4. How long does it take to complete a Share Purchase Agreement?
The timeline varies based on transaction complexity but typically spans several weeks to months. This period includes negotiations, due diligence, drafting, review, signing, fulfilling conditions, and closing.
5. Who typically drafts the SPA -the buyer or the seller?
Typically, the buyer’s legal counsel drafts the initial SPA, as the buyer is the party acquiring ownership and assuming liabilities. However, negotiation involves both parties’ lawyers until final agreement is reached.
6. How long do reps, warranties, and indemnities typically last?
Representations, warranties, and indemnities commonly survive for 18 to 24 months after closing but can vary based on negotiation. These protections help allocate risks related to breaches or undisclosed liabilities.
7. What is involved in a share transfer agreement registration?
Upon registration, pertinent authorities, including the Canada Revenue Agency, are notified. Corporate records, such as the shareholder registry, are updated, and government filings may be modified to reflect the new ownership. This procedure makes sure the transfer is recognized legally.
