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Seller Friendly Asset Purchase Agreement for Canada

Seller Friendly Asset Purchase Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that documents the terms and conditions for the sale and purchase of business assets, structured to favor the seller's interests. This agreement details the assets being sold, purchase price, payment terms, representations and warranties, conditions precedent, and post-closing obligations. It incorporates specific Canadian legal requirements, including compliance with federal and provincial regulations regarding asset transfers, tax implications, employment matters, and industry-specific requirements. The document includes robust seller protections in areas such as representations and warranties, indemnification provisions, and liability limitations.

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What is a Seller Friendly Asset Purchase Agreement?

This Seller Friendly Asset Purchase Agreement is designed for use in Canadian business transactions where a company or individual is selling business assets and seeks strong legal protections in the transaction. The agreement is particularly suitable when the seller has a strong negotiating position or when the assets being sold are highly valuable or unique. It incorporates comprehensive provisions addressing federal and provincial legal requirements, including tax considerations (GST/HST and income tax), employment laws, privacy regulations, and industry-specific compliance matters. The document structure provides enhanced protection for the seller through carefully crafted representations and warranties, limited indemnification obligations, and favorable liability caps. This type of agreement is commonly used in corporate divestitures, business unit sales, or when selling substantial business assets while maintaining the seller's corporate entity.

What sections should be included in a Seller Friendly Asset Purchase Agreement?

1. Parties: Identification of the seller and purchaser, including full legal names and addresses

2. Background: Context of the transaction, including brief description of the business and assets being sold

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. Purchase and Sale: Description of assets being sold and explicit exclusion of assets not included in the sale

5. Purchase Price: Details of the purchase price, payment terms, and any adjustments

6. Closing: Closing date, location, and deliverables required from each party

7. Seller's Representations and Warranties: Extensive representations and warranties from the seller, with appropriate qualifications and limitations

8. Purchaser's Representations and Warranties: Basic representations and warranties from the purchaser

9. Conditions Precedent: Conditions that must be satisfied before closing, including seller's conditions

10. Covenants: Pre-closing and post-closing obligations of both parties

11. Indemnification: Indemnification provisions with caps, baskets, and time limitations favorable to seller

12. Termination: Circumstances under which the agreement may be terminated

13. General Provisions: Standard provisions including notices, assignment, severability, and governing law

What sections are optional to include in a Seller Friendly Asset Purchase Agreement?

1. Tax Matters: Detailed tax provisions when significant tax implications exist or specific tax treatment is required

2. Employee Matters: Provisions regarding employees when the transaction involves transfer of employees

3. Intellectual Property: Detailed IP provisions when significant IP assets are involved in the sale

4. Environmental Matters: Specific provisions when the assets include real property or environmental risks

5. Transition Services: Terms for post-closing services provided by seller when needed for business continuity

6. Non-Competition and Non-Solicitation: Restrictions on seller's future activities when required by transaction circumstances

7. Third Party Consents: Process for obtaining third party consents when key contracts or licenses require consent to transfer

8. Bulk Sales Compliance: Provisions addressing bulk sales legislation compliance where applicable

What schedules should be included in a Seller Friendly Asset Purchase Agreement?

1. Schedule A - Purchased Assets: Detailed list and description of all assets being purchased

2. Schedule B - Excluded Assets: List of assets specifically excluded from the transaction

3. Schedule C - Purchase Price Allocation: Allocation of purchase price among asset categories for tax purposes

4. Schedule D - Assumed Contracts: List of contracts being assumed by the purchaser

5. Schedule E - Excluded Liabilities: Detailed list of liabilities explicitly excluded from the purchase

6. Schedule F - Required Consents: List of third party consents required for closing

7. Schedule G - Intellectual Property: Detailed list of IP assets included in the sale

8. Schedule H - Real Property: Details of any real property assets included in the sale

9. Schedule I - Employee Information: List of employees and related information if applicable

10. Schedule J - Form of Closing Documents: Forms of various closing documents to be executed

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions










Clauses








































Relevant Industries

Manufacturing

Retail

Technology

Professional Services

Healthcare

Real Estate

Construction

Transportation

Energy

Mining

Agriculture

Hospitality

Financial Services

Media and Entertainment

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Tax

Operations

Human Resources

Compliance

Risk Management

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Secretary

Business Development Director

Mergers & Acquisitions Director

Chief Operating Officer

Finance Director

Legal Counsel

Tax Director

Corporate Development Manager

Risk Manager

Compliance Officer

Operations Director

Human Resources Director

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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