Purchase and Sale of Businesses in Gatineau and Surrounding Areas
Are you thinking of buying a business or selling your business? Adriana Sukkar Legal Services will accompany you through every step of the purchase and sale of businesses in Gatineau and its surroundings. We will help you seize the business opportunity effectively and allow you to come out of it with advantages. Our notaries take the time to analyze each document on the transfer of assets of your business and we help you determine the sale plan that would be advantageous for you.
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When collaborating with us, you will be reassured that we are professional, confidential and rigorous in order to help you find optimal solutions. For the purchase and sale of businesses, we defend your legal and financial interests during the negotiation sessions.
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We are here to serve you and will be happy to answer all your concerns. Call us now!
Our Corporate Services
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Sale of shares
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Sale of assets
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Sale and purchase agreements
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Due diligence searches
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Documents required for funding
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Closing the transaction
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Registration of a trade name
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Partnership agreements
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Corporate minutes
Business Transactions
There are two main ways to sell a business, you can proceed by selling controlling shares in the business or by selling the assets of the business. It is important to plan your business sale or purchase in advance and to consult your notary. The main difference between these two methods is the nature of what a buyer acquires. In a share sale the buyer purchases the controlling shares of the company that owns a business. In an asset sale, the buyer purchases the assets of the business, (i.e. the name, goodwill, telephone number, equipment ...).
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Depending on the method of acquisition chosen, the tax implications and legal formalities will be quite different, and the direct or indirect liability of the seller and the buyer will be different. It can also be assumed that, mainly due to the tax situation resulting from the sale, the price charged by the seller will be different.
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The majority shareholder of the joint-stock company or the group controlling the joint-stock company will, in the vast majority of cases, prefer to sell its shares rather than the assets, since this way provides a very important tax advantage to the seller: if certain conditions are met, the seller could be entitled to an exemption from paying tax on the capital gain generated by the sale of its shares, this exemption will allow the seller to save several hundreds of thousands of dollars, which would normally be payable in taxes.
What Are the Advantages to the Buyer of Purchasing the Assets Rather than the Shares?
- The acquisition of assets allows the buyer to base the depreciation of the assets on a higher amount, i.e. on the purchase price;
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- The acquisition of assets allows the buyer, if he does not pay cash, to offer a guarantee to the seller for the balance due on the assets acquired alone;
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- This type of acquisition avoids the risk of the buyer having to deal with the company's tax and legal problems, which were unknown to him at the time of its acquisition (legal proceedings);
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- Furthermore, the buyer is not bound by the contracts, debts and liabilities of the business beyond the sale price, except insofar as he expressly assumes responsibility for them; he can acquire only the assets necessary for the operation of his business.
What Are the Disadvantages for the Seller of Proceeding with an Asset Sale Rather than a Share Sale?
- The joint stock company, and not the shareholder, will receive the sale price, and the joint stock company will be subject to certain taxes when it is required, by way of dividends or otherwise, to transfer to the shareholders the amounts it received as the sale price of its assets.
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- Since it is the assets that have been sold, there will be a recapture of depreciation and "presumably" a capital gain within the company.
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- The shareholders of the company, assuming it ceases trading, will eventually have to go through the formalities of a liquidation and distribution of assets, and the costs and taxes will often be considerable.
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- The selling shareholder cannot benefit from the capital gains exemption following the disposal of qualifying shares of a small business.
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- Disposal affecting the continuation of substantial business of the company can only take place with the authorization of the shareholders by special resolution.
From the drafting of the promise to purchase to the drafting of the deed of sale of your business, our notaries take the time to analyze your situation to determine the sale or purchase plan that would be advantageous for you. Contact us for more information and to have your questions answered.
