Share purchases, due diligence, and the closing that follows.

A share purchase is a transaction where a buyer acquires the shares of a corporation, taking ownership of the company itself rather than buying its assets piecemeal. The corporation continues unchanged — same legal entity, same contracts, same history, same liabilities — but the ownership behind it changes. Share purchases are common on exits, partial buyouts, family transfers, and certain mergers and acquisitions.

A share purchase transfers the corporation; the buyer steps into all of its assets and all of its liabilities, including unknown ones. An asset purchase transfers specific assets (and sometimes specific liabilities) the parties have agreed to include; the corporate shell stays with the seller. Buyers typically prefer asset purchases (cleaner, no inherited liabilities, sometimes better tax treatment); sellers typically prefer share purchases (often better tax treatment for the seller, including the lifetime capital gains exemption on qualifying small business corporation shares). Most M&A negotiations include this trade-off.

Due diligence is the buyer's investigation of the target corporation before closing — financial statements, contracts, leases, intellectual property, employees, litigation, regulatory compliance, taxes, environmental matters. The output is a list of issues the buyer wants addressed: representations and warranties from the seller, holdbacks against indemnities, price adjustments, deal-killing problems. Doing it properly is the work that converts a fair deal into a deal that does not collapse a year after closing.

Representations and warranties are statements the seller makes about the target corporation as of closing — that the financial statements are accurate, that the corporation owns the assets it says it owns, that there is no undisclosed litigation, that taxes have been paid, that material contracts are in good standing. If a representation turns out to be false, the buyer can typically claim damages. Reps and warranties are negotiated heavily — duration of survival, indemnity caps, baskets, materiality qualifiers all matter.

Often yes, on share purchases. A holdback is a portion of the purchase price held in trust at closing — usually in the trust account of the purchaser's lawyer — and released to the seller after a defined period (typically 12 to 24 months) provided no indemnity claims have been made. The size of the holdback is negotiated; typical ranges are 10% to 20% of the purchase price. Holdbacks give the buyer a real source of recovery for breach-of-rep-and-warranty claims; they give the seller comfort that funds will be released on a predictable schedule if no claims arise.

From signed letter of intent to closing, typical small-to-mid-market share purchases run 60 to 120 days. The major time consumers are due diligence (often 4 to 8 weeks) and the negotiation of the share purchase agreement (often 4 to 8 weeks). Larger or more complex deals — multiple jurisdictions, regulatory approvals, financing contingencies — take longer. We coordinate with your accountant, your tax lawyer (where the deal warrants one), and the other side's counsel to keep the timeline on track.

On larger or more structured deals, often yes. Share purchases involving section 85 rollovers, butterfly reorganisations, or post-closing earnouts can have significant tax implications that benefit from specialist tax counsel. On smaller deals (single owner, single share class, straightforward structure), our corporate work plus your accountant's tax review is usually enough. We will tell you at intake whether the file warrants tax counsel.