Report

Acquisitions of private businesses in Canada Acquisitions of private businesses in Canada

A practical guide to the common issues surrounding acquisitions of private businesses in Canada

July 9, 2025 25 MIN READ

Download the full report [PDF]

Authors: Alex Gorka and Brett Anderson

Consents and approvals

Corporate approvals

Asset acquisitions

If the assets being sold by a corporation constitute all or “substantially all” of the seller’s assets, the transaction will require the approval of a two-thirds majority of the shareholders of the seller. A transaction may qualify as involving all or “substantially all” of the assets of a corporation on either a quantitative or qualitative basis.

If shareholder approval is required, where there is more than one class of shares and where the proposed sale may affect each class in a different manner, each class may be entitled to vote separately in providing the required approval, even where a particular class of shares is not normally entitled to vote.

Shareholders who dissent in connection with the resolution to approve the transaction have remedies available to them, including the right to be paid fair value for their shares from the corporation.

Share transactions

The articles of many non-public Canadian corporations contain restrictions on the transfer of their shares (such as board of directors or shareholder approval to transfer) in order to assist the corporation in qualifying for certain exemptions from securities laws. This can easily be determined as part of the purchaser’s legal due diligence, as corporate articles must be filed and are available publicly.

Many private corporations having more than one shareholder will have a shareholders’ agreement in effect, and a purchaser will want to be satisfied (either through appropriate due diligence and representations and warranties or an opinion from the seller’s counsel) that the agreement has been complied with in effecting the share sale.

Regulatory approvals

Pre-closing notification may be required under the Competition Act (see “Other considerations”).

Pre-closing “net benefit” review may be required under the Investment Canada Act (see “Other considerations”). In an asset acquisition, specific regulatory approvals may be required in order for the transaction to proceed.

For example:

Government permits or licenses will typically require the consent of the issuing authority for transfer (or the purchaser will be required instead to apply for and obtain its own versions).

Ownership of agricultural land is regulated in certain jurisdictions, and consent may be required for its acquisition by an entity resident outside of
the jurisdiction.

Acquisitions in certain regulated industries (such as communications and broadcasting and certain transportation industries) may entail detailed and time-consuming processes.

See Osler’s Investment Canada Act and Competition Act Quick Reference guide for more detail on regulatory approvals.

Contractual approvals

Many contracts prevent a party from assigning the contract without the consent of the other party or contain terms that trigger a default if a change of control of the target corporation occurs without the consent of the counterparty to the contract.

Where the affected contracts are material to the business being acquired, the purchaser may wish to make obtaining consent of the counterparty a condition to completing the transaction.

Next

Closing and post-closing matters

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