If you are thinking about selling your business, you should be aware of the heightened need these days for protection of private information. I am constantly surprised by the amount of private information business owners are willing to supply to prospective purchasers of their business. Unsophisticated sellers often allow potential buyers access to highly confidential information, without ever considering that they may be giving up business secrets for free. As a seller, you should never allow anybody to access your confidential information without first having them sign a confidentiality agreement. Continue reading
If you are selling your business, you have a number of choices on how to market your business for sale. You can try to sell it yourself (“for sale by owner”) or you can use an M&A advisor (also sometimes referred to as a “business broker”) to sell it for you. Why not simply try to sell the business yourself? The clear benefit is that you save on commission and that can be quite a large savings. However, I do not recommend the “for sale by owner” method for many reasons. Continue reading
When acquiring a business, often a key component is the contracts to which the company is a party to. Ensuring the transfer of any such contracts can have significant impacts on the structure and timing of the acquisition of a business.
Previously, I blogged about a client that took my advice and cleaned up the share structure of his business even though at the time the business was not doing well financially. In that case, the client wanted to eliminate some minority shareholders and on my advice used the circumstances to his advantage. However, eliminating minority shareholders isn’t the only strategy to use in tough financial times. There is another strategy for future planning that you can use to your advantage in these circumstances.
A corporation that meets the definition of “Canadian-Controlled Private Corporation” (“CCPC”) in the Income Tax Act is entitled to a number of tax benefits, including a reduction in corporate income tax on active business income. Because of these tax advantages, the question of whether or not a corporation qualifies as a CCPC is often an important one.
I help many business owners with their business succession planning and as a result I run into many different situations. Sometimes the owner is ready to sell the business and just can’t wait to retire. Sometimes the owner is nowhere near retirement and doesn’t want to even discuss succession. Then there are those business owners that are going through tough times and tell me they just don’t have time to plan for succession. Rather, they want to focus on “righting the ship” and don’t want to think about exit until they have re-built the value of their business. In these circumstances, I point out that if the business has not done well in the last few years, there is still an opportunity for some serious planning. Even in bad times, opportunities exist, although they might not be so obvious.
With services such as DocuSign becoming more prevalent by the day and the obvious attraction to the convenience that such solutions offer, executing documents by using electronic or digital signature technology is coming up in transactions and other routine matters with increasing frequency. The question is whether documents and agreements signed by applying an electronic or digital signature are valid, and what, if any, requirements there are with respect to such electronic signatures.
Are you thinking of selling your business or buying a business? As part of the pre-transaction due diligence process, one of the first items potential buyers and their advisors will want to review is the target company’s corporate minute books. This applies to both asset and share transactions, but is particularly the case when a potential buyer is going to buy the shares of the target company. In more cases than not, corporate minute books need to be updated prior to the actual closing to address outstanding matters, filings and deficiencies in the records. While this often results in more pre-closing costs than would have been the case had the minute books been properly maintained all along, there are more reasons than just avoiding the added costs for keeping proper minute books and corporate records. Here are a few considerations: Continue reading
In this second post of my ongoing series focusing on the private company purchase and sale agreement I tackle the introductory components of the contract, such as the title, date, parties, recitals and “lead-in” to the meat of the agreement. Click here to review my first entry, a summary of the material components of a typical purchase and sale agreement.
As Aaron Singer mentioned in his February 11, 2015 post, the Competition Bureau has recently set the pre-merger notification threshold relating to transaction size for 2015 at $86 million. However, while a transaction below these thresholds is not notifiable, the Competition Bureau may nonetheless review the transaction if there are legitimate competition concerns and the Bureau is made aware of the transaction – as occurred in Tervita Corp. v Canada (Commissioner of Competition) (“Tervita“).
Tervita attracted a lot of attention, as it was unusual for two reasons.