Acquiring a Canadian business

Things to Know

The two most common structures used to acquire a business is a share purchase or asset purchase. In a share purchase, the entity carrying on the existing business is purchased; all assets and liabilities will be acquired. In an asset purchase, a buyer can pick and choose what assets it would like to acquire, and which liabilities to assume. Other more complex structures are also sometimes used.

Governmental approvals may be needed under the Investment Canada Act and/or the Competition Act, depending on the purchase price and size of the business being acquired. Also, companies operating in certain regulated industries (such as telecommunications) may be subject to foreign ownership restrictions or require governmental approval.

Things to Do


Determine the optimal structure for acquiring the business. In addition to deciding between a share purchase and asset purchase, consider whether a new Canadian subsidiary should be established to complete the acquisition. Tax considerations are an important component of the analysis, and a tax advisor should be consulted. 


Investigate the business to be acquired. This will normally include a review of all important contracts, confirming ownership of key assets, assessing the liabilities of the business, and obtaining lien search results. 


Determine if the transaction will give rise to a requirement for approval under the Investment Canada Act and/or the Competition Act. Determine whether the business being acquired is in a regulated industry that restricts foreign ownership. 


Engage counsel to assist in negotiating a legally binding purchase agreement.

Canada Company Registration

Company Formations Canada offers fast and easy company registration in Canada for non-Canadian residents and foreign companies wishing to operate and do business in Canada.

Register a new company in Canada as a non-Canadian resident

Register a foreign company in Canada

Canada Registered agent services for foreign companies and non-Canadian residents.

Canada Nominee director services for foreign companies and non-Canadian residents.

Shared from: Osler, Hoskin & Harcourt llp Publication

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