Share Sale Canada
Seller has suggested that they will accept our offer if they we are willing to pursue a share sale. I have never done this before, and don't know what to look for or what questions to ask. Property is in Toronto if that makes any difference. Any ideas?
[{"id": "fqrsg1n", "text": "You\u2019re doing an entity level transaction not a property level transaction which means that you assume ALL liabilities from seller. You need to fully understand what the seller has contracted for, what outstanding insurance / litigation claims they have, and get a big honking indemnity. It\u2019s a lot riskier than an outright asset purchase because of the seller liability you\u2019re taking on. Do extra extra homework on the asset and the seller and get a good lawyer to help with PSA negotiation to make sure you button up any risks that aren\u2019t disclosed. Good luck!", "replies": [], "depth": 1}, {"id": "fqrz7ds", "text": "Hi, commercial broker in Toronto here. He is doing this to reduce his capital gains tax. We are currently doing 2 of those. As the sister post said, you would be assuming all liabilities of the seller. Is the seller business or just a holding company? Your agent and lawyer should be able to advise you further but feel free to PM me if you like.", "replies": [], "depth": 1}]