Private M&A—Canada—Q&A guide

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Private M&A—Canada—Q&A guide
  • 1. How are acquisitions and disposals of privately owned companies, businesses or assets structured in your jurisdiction? What might a typical transaction process involve and how long does it usually take?
  • 2. Which laws regulate private acquisitions and disposals in your jurisdiction? Must the acquisition of shares in a company, a business or assets be governed by local law?
  • 3. What legal title to shares in a company, a business or assets does a buyer acquire? Is this legal title prescribed by law or can the level of assurance be negotiated by a buyer? Does legal title to shares in a company, a business or assets transfer automatically by operation of law? Is there a difference between legal and beneficial title?
  • 4. Specifically in relation to the acquisition or disposal of shares in a company, where there are multiple sellers, must everyone agree to sell for the buyer to acquire all shares? If not, how can minority sellers that refuse to sell be squeezed out or dragged along by a buyer?
  • 5. Specifically in relation to the acquisition or disposal of a business, are there any assets or liabilities that cannot be excluded from the transaction by agreement between the parties? Are there any consents commonly required to be obtained or notifications to be made in order to effect the transfer of assets or liabilities in a business transfer?
  • 6. Are there any legal, regulatory or governmental restrictions on the transfer of shares in a company, a business or assets in your jurisdiction? Do transactions in particular industries require consent from specific regulators or a governmental body? Are transactions commonly subject to any public or national interest considerations?
  • 7. Are any other third-party consents commonly required?
  • 8. Must regulatory filings be made or registration (or other official) fees paid to acquire shares in a company, a business or assets in your jurisdiction?
  • 9. In addition to external lawyers, which advisers might a buyer or a seller customarily appoint to assist with a transaction? Are there any typical terms of appointment of such advisers?
  • More...

Private M&A—Canada—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to Private M&A in Canada published as part of the Lexology Getting the Deal Through series by Law Business Research (published: July 2020).

Authors: Bennett Jones LLP—John M. Mercury; James T. McClary; Bryan C. Haynes; Ian C. Michael; Kristopher R. Hanc; Drew C. Broughton

1. How are acquisitions and disposals of privately owned companies, businesses or assets structured in your jurisdiction? What might a typical transaction process involve and how long does it usually take?

Generally, a purchase and sale agreement is entered into to govern the acquisition or disposition of privately owned companies, businesses or assets. The sale of a business is commonly accomplished by way of a sale of shares or assets. Sellers often prefer share sales because of lower applicable tax rates on gains. Buyers often favour asset purchases because of the possibility of achieving tax benefits and excluding unwanted liabilities. Sellers of smaller ‘Canadian-controlled private corporations’ may be able to utilise a (limited) lifetime capital gains exemption on a share sale in addition to the other benefits of a clean exit by way of a sale of shares and, as a result, typically prefer share transactions.

Companies may also be combined by way of an amalgamation pursuant to the relevant corporate statute. Amalgamations must be approved by a super-majority vote of shareholders (generally two-thirds

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