Neufeld Legal P.C.
Purchase Business - Strategy and Law of Buying a Business
416-887-9702    905-616-8864    403-400-4092 

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You should consider how you intend to finance the purchase early on in the process. There are many alternatives, however three common examples include:

1. paying cash for the assets or shares;

2. borrowing the funds; or

3. utilising a combination of cash and borrowings to fund the acquisition.

If you intend to borrow funds you should consider approaching financiers at the first available opportunity. The method of financing the purchase can influence the transaction structure of the purchase.

If you elect to borrow funds, a financier will likely require security for the funds lent to you to purchase the business. The types of security that a financier may ask for include: a fixed or fixed and floating charge over assets which could involve the financier taking a ‘fixed’ charge over assets of the target such as real property, plant and equipment, intellectual property rights and contracts and a ‘floating’ charge over cash and stock-in-trade; a mortgage over the shares purchased in the target company; guarantees and/or indemnities by the directors of the buyer; and/or if applicable, guarantees and/or indemnities by the holding company of the buyer.

For experienced legal advice when purchasing a business, contact business lawyer Christopher Neufeld at or by telephone at 416-887-9702 [Toronto]; 403-400-4092 [Calgary]; or 905-616-8864 [South West Ontario].


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The information presented herein is intended for information purposes only and solely as a general guide. The information is not intended as legal advice. It is a summary of selected/potential issues and does not represent a definitive or complete statement of strategies and law relevant to scenarios that are highly particularized, fluid and rarely, if ever, certain and fully disclosed. The information may not address the special needs, interests and circumstances of a particular scenario, with a single factor potentially necessitating an entirely different approach. Scenarios differ and you are strongly urged to seek specific professional business and legal advice.

Neufeld Legal P.C. is strategically positioned to effectively serve key Canadian business markets, with offices located in Toronto, Calgary, Mississauga and Burlington. As such, we are capable of effectively serving the western Greater Toronto Area (GTA), including downtown Toronto, Mississauga, Burlington, Oakville, Hamilton, Brampton, Milton, Guelph, Kitchener Waterloo, Cambridge, London, St. Catharines and Niagara Falls, together with the city of Calgary and southern Alberta. Copyright 2010.

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