Purchase or Sale of a business

How does the business purchase or sale process work?

Please follow this link for a detailed, step-by-step guide to the business purchase or sale process: .

Generally, the process includes:

• Initial negotiation and signing of a Letter of Intent (optional but recommended),
• Conducting due diligence,
• Drafting and negotiating the Purchase and Sale Agreement,
• Coordinating financing (if applicable),
• Preparing closing documents,
• Completing the closing and transferring ownership.

What information does Fletcher Barrow need to facilitate my business purchase or sale?

Typically, we will need:

• A copy of the draft or signed Letter of Intent (if applicable),
• Corporate records and ownership structure documents,
• Financial statements, leases, and key contracts,
• List of employees and employment agreements,
• Inventory lists and equipment schedules,
• Details of any financing or lender involvement.

If you are obtaining financing, please inform your lender that Fletcher Barrow will be acting on your behalf so mortgage or loan instructions can be forwarded to us promptly.

What are closing costs, and what should I expect to pay?

Closing costs generally consist of:

• Legal Fees (for reviewing/drafting agreements, due diligence, and registration work),
• Disbursements, which may include:
  • Corporate and security searches (e.g., PPSA searches),
  • Title searches (for asset purchases involving real estate),
  • Governmental registration fees (e.g., registering transfers, new business name registrations),
  • Title insurance (if real estate is involved).

Can you assist with both small business and large commercial transactions?

Yes!
Our experienced team handles all types of business transactions, including:

• Small business purchases and sales (e.g., franchises, retail stores, professional practices),
• Mid-size corporate acquisitions,
• Large commercial transactions involving complex assets, multiple properties, and sophisticated financing arrangements.

We tailor our approach based on the scale and complexity of each transaction.

What is the difference between a share purchase and an asset purchase?

Share Purchase:
The buyer acquires the shares of the company, thereby taking ownership of the business as a going concern, including its assets, liabilities, contracts, and obligations.

Asset Purchase:
The buyer selects and purchases specific assets (and sometimes assumes selected liabilities), leaving the corporate entity in the seller’s hands.

Each method has unique legal, tax, and liability implications — we will guide you through which structure is most beneficial for your transaction.

What types of due diligence should be conducted before purchasing a business?

Due diligence typically involves:

• Reviewing financial statements and tax filings,
• Confirming good standing of the corporation,
• Verifying the validity of key contracts and leases,
• Checking for outstanding lawsuits or liabilities,
• Inspecting employee obligations and agreements,
• Environmental reviews (for properties or certain industries).

We work with you and your financial advisors to conduct a thorough due diligence process to minimize risk.

Can you help with drafting or reviewing the Purchase and Sale Agreement?

Absolutely.
Our services include:

• Drafting the Agreement of Purchase and Sale (APS),
• Reviewing and negotiating terms on your behalf,
• Ensuring critical clauses are included (e.g., representations and warranties, conditions precedent, non-compete agreements).

We tailor agreements to protect your interests while promoting a smooth transaction.

Do I need consent from third parties to complete the purchase or sale?

Possibly.
Depending on the structure of the deal, third-party consents may be required for:

• Assignment of leases,
• Assignment of contracts or service agreements,
• Financing approvals,
• Shareholder or partner approvals (for corporate transactions).

We will identify any necessary consents early and assist you in securing them before closing.

How long does a typical business sale or purchase take to close?

Timing depends on the complexity of the transaction but generally ranges from 30 to 90 days after the Agreement is signed.

Factors that can affect timing include financing approvals, due diligence findings, and third-party consent requirements.

What happens after closing?

After closing:

• Funds are disbursed,
• Ownership or asset transfer documents are filed or registered,
• Key operational matters (e.g., assignment of leases, notifying employees and suppliers) are finalized.

We remain available to assist you with post-closing matters such as updating corporate records, name changes, or further registrations.