Buying and selling a business in Quebec

Buying and selling a business

The transaction starts
before the buyer does.

Buying and selling a business does not begin with a handshake. Buying or selling a business in Quebec calls first for three answers: what exactly is being sold, in what order the steps happen, and from what point a lawyer needs to be on the file.

Those three questions come up before there is a buyer or a seller across the table. A business put on the market before its registers, contracts and permits have been put in order loses time, then price. A buyer who makes an offer before knowing whether they are buying shares or assets commits on a basis they will have to redo.

This page is a starting point, not a full file. It sets out what gets decided upstream, then points you to the page that matches your situation: you are buying, you are selling, or the deal is large enough to be run as a project.

We act on both sides, but never in the same transaction. What we tell a seller about the reach of their warranties is what we would tell a buyer about the reach of their verifications.

Two businesspeople shaking hands across a desk

What we do

The decisions that come
before the negotiation.

Defining what is being sold

The shares of the company, its assets, a division, a minority stake, sometimes only a client base and a name. The object is defined before the price, because an undefined object means the two sides are comparing two different things.

Settling shares or assets

This is a decision, not a mechanic. Seller and buyer do not have the same interest in it, and the choice determines what follows the business: contracts, leases, permits, employees and liabilities. It is made with your tax specialist, early. See share purchase or asset purchase.

Putting the steps in order

Confidentiality, then the letter of intent, then due diligence, then the agreement and closing. Each step commits you a little further. The files that go wrong are almost always the ones where a step was skipped to move faster.

Telling apart third parties, family and employees

Selling to a competitor, to your children or to your team is not prepared the same way. The balance of power, the financing, the timetable and the seller’s role after closing all change. The documents remain those of a sale.

Saying when a lawyer becomes useful

Rarely at signing, often well before. As soon as a figure, an exclusivity or a date is exchanged in writing, the frame of the transaction is being set. We will also tell you, where that is the case, that a simple deal does not need us.

Where to go next

Three paths,
depending on your situation.

What comes next depends on which side you are on and how large the deal is. Each of these pages takes the transaction in detail, from the first approach through to closing.

You are buying a business The takeover seen from the buyer’s side: what to verify, what to insist on, and what is negotiated before you commit. Explore → You are selling your business The sale seen from the seller’s side: putting the house in order, structuring the exit, and what still binds you afterwards. Explore → Mergers and acquisitions in Quebec Several parties, financing, companies combining: the transaction is then run as a project, with its own timetable. Explore →

Frequently asked questions

What we are asked most.

Is it better to sell the shares or the assets?

The two sides do not have the same interest. The seller looks first at the tax treatment of what goes into their pocket. The buyer looks at what comes along with the business: contracts, permits, employees and liabilities. The choice is settled early, with your tax specialist, because it changes the price as much as the documents.

When should a lawyer get involved?

Before the letter of intent. That is the document that sets the object, the price, exclusivity and the timetable, and everything else is then negotiated within the frame it creates. A letter of intent signed without review is hard to walk back.

Is a transfer to family or employees the same as a sale?

It is a sale, and the documents are the same. What changes is everything around them: the balance of power, the timetable, how the purchase is financed and the role the seller keeps after closing. Expectations no one wrote down cause more disputes there than the clauses do.

Should the business be valued before it goes on the market?

Value is not a lawyer’s work. It is discussed with your accountant or a valuator. Our part begins when that figure has to become a price: payment terms, adjustments, holdbacks and warranties. A sound figure poorly translated into the agreement protects no one. See what your business is worth.

Two readings, depending on which side you are on: selling your business and the tax bill, to prepare an exit, and due diligence, to know what a buyer will look at.