purchase / sale

sale. Your business (or the business carried on by your company) has grown and now it is time for someone else to take control. You struggle with whether you should have your company sell the business (i.e. an asset deal) or whether you should sell the company itself (i.e. a share deal). You know that there are tax reasons why you might want to push for a share deal, but the purchaser has indicated that she wants to be free of your company’s warts – i.e. the liabilities of your company that the purchaser would inherit in a share deal.

purchase. Or perhaps you want to purchase a business or other assets. You know that you will inherit the company’s warts if you opt for a share deal, however you are nervous that even in an asset deal you might become liable to the vendor’s creditors (e.g. the Canada Revenue Agency) if you complete the transfer. The vendor is requiring that you purchase his company (e.g. so that he can take advantage of the capital gains exemption) rather than do an asset deal, and you are looking for tax-efficient options to find a middle ground while still accommodating the vendor. You want to be sure that your agreement with the vendor mirrors the representations and covenants that he has made to and with you.

options. Perhaps the business will ultimately be a gift to your children or will be purchased over a number of years. Perhaps you will effectively be paid from the future profits of the company. Perhaps you will retain voting control until you are paid or you feel that the company is in good hands. Options are available.