Due Diligence Considerations When Purchasing a Business in Canada

Brooks Barristers and Solicitors

Deciding whether to start or purchase a business in Canada (and in which industry) is likely one of the most important decisions you will ever make. Below is a list of questions to ask and issues to consider when going through the due diligence process. Ensure that you obtain as much information as possible with respect to the business and its corresponding industry and consider all possible alternatives before making your decision.

  1. Have you conducted all the appropriate searches including PPSA (Personal Property Security Act), bankruptcy, internet and other corporate searches on the vendor and its principals?
  2. What liabilities will you be assuming when the transaction closes?
  3. Have you engaged in "boots on the ground" research (e.g., assessing customer flow, taking samples of inventory, conducting environmental assessments, etc.)?
  4. Have you selected the person in your organization to conduct the due diligence?
  5. Have all material documents been obtained and examined thoroughly?

Brooks Barristers & Solicitors is a boutique business law firm located in Toronto, Ontario specializing in serving the needs of entrepreneurs, privately-owned Canadian businesses and their principals.

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