When you sell an Ontario business by selling the shares of the company that owns it, the share purchase agreement sets the price and how it is paid, what the buyer can come back to you for after closing, and when you are finally clear of the deal. Smutylo Law+ acts for sellers and buyers of owner-managed Ontario corporations, at a fixed fee where the scope allows.
In a share sale, the buyer buys the corporation itself, with its contracts, employees, history and liabilities. In an asset sale, the corporation sells selected assets and keeps the rest. Sellers often prefer a share sale for tax reasons — gains on qualifying shares may be sheltered by the lifetime capital gains exemption — and buyers often prefer assets. See share sale vs. asset sale.
A studio, clinic, agency or trades business sold for a modest price still needs a share purchase agreement that works. The issues are the same as in a larger deal; the document can be shorter. Fees for owner-managed sales are usually quoted as a fixed fee once the structure is known. If the buyer came to you directly, see selling without a broker; for the full process, see selling a business.
A share purchase agreement is the contract under which a buyer acquires the shares of a corporation from its shareholders. In Ontario business sales it sets the price and how it is paid, the seller’s representations and warranties about the company, the indemnities that apply if those statements prove wrong, restrictive covenants such as a non-compete, and what each side must deliver at closing.
Yes. Having a buyer is when you most need one, because the agreement is about to be written. The terms that decide how much of the price you keep — holdbacks, indemnities, survival periods, earn-out conditions — are set in the agreement, not in the handshake. See do I need a lawyer to sell my business.
In larger transactions the buyer’s lawyer usually prepares the first draft. In owner-managed sales there is often no fixed convention, and a seller can offer to draft. The first draft sets the starting position on every point, so it is worth offering.
Part of the purchase price kept back at closing — by the buyer or in trust — for a set period, to cover price adjustments or claims under the agreement. The size of the holdback, how long it is held and what can be paid out of it are all negotiable.
For an owner-managed business with a willing buyer and organised records, the agreement and closing often take several weeks. The timeline is usually driven by due diligence, financing and third-party consents rather than by the drafting itself.
Book a free 20-minute call. Bring what you have — a letter of intent, the buyer’s offer, or just the price you discussed.
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