Things to Consider Before Purchasing a Corporation in Ontario


Purchasing an existing corporation in Ontario can be an attractive option for entrepreneurs and investors looking to enter the Canadian market or expand their business operations. However, before diving into a corporate acquisition, it’s crucial to conduct thorough due diligence and carefully consider various factors. In this blog post, we will highlight essential considerations to keep in mind when purchasing a corporation in Ontario and emphasize the importance of seeking legal guidance from professionals like Falcon Law PC. For expert assistance with your corporate acquisition, please contact Falcon Law PC at 1-877-892-7778 or via email at

  1. Business Valuation:
    • Determine the fair market value of the corporation you intend to purchase. Consider assets, liabilities, intellectual property, and intangible assets.
    • Assess the company’s financial health by reviewing its financial statements, including income statements, balance sheets, and cash flow statements.
  2. Legal Structure:
    • Decide whether to acquire the shares of the corporation (share purchase) or its assets (asset purchase). Each option has tax and legal implications that require careful evaluation.
    • Understand the legal structure of the target corporation, including any subsidiaries, partnerships, or joint ventures.
  3. Due Diligence:
    • Conduct thorough due diligence to uncover any hidden liabilities, pending legal issues, or financial risks associated with the corporation.
    • Review contracts, agreements, and ongoing legal disputes that may affect the acquisition.
  4. Regulatory Compliance:
    • Ensure that the target corporation complies with all federal, provincial, and municipal regulations, including licensing and zoning requirements.
    • Verify that the corporation is in good standing with relevant regulatory authorities.
  5. Intellectual Property:
    • Confirm ownership of intellectual property rights, trademarks, patents, and copyrights, and ensure they are transferable as part of the acquisition.
    • Assess the value and enforceability of intellectual property assets.
  6. Contracts and Agreements:
    • Review all existing contracts and agreements, including customer contracts, supplier agreements, leases, and employment contracts.
    • Determine if these contracts can be assigned or if new agreements need to be negotiated.
  7. Employees and Labor Relations:
    • Understand the current workforce, including the number of employees, compensation packages, and any ongoing labor disputes or collective bargaining agreements.
    • Consider the impact on employees during and after the acquisition.
  8. Tax Implications:
    • Assess the tax implications of the acquisition, including capital gains tax, income tax, and sales tax.
    • Consult with tax professionals to develop a tax-efficient structure for the transaction.
  9. Financing and Funding:
    • Determine how the acquisition will be financed, whether through cash reserves, loans, investor capital, or a combination.
    • Evaluate the corporation’s historical and projected cash flow to support the financing plan.
  10. Legal Support:
    • Seek legal guidance from experienced corporate lawyers, like Falcon Law PC, to navigate the complexities of the acquisition process.
    • Ensure that all legal documents, including purchase agreements and due diligence reports, are carefully reviewed and negotiated.


Purchasing a corporation in Ontario is a significant business decision that requires careful consideration of various factors. Thorough due diligence, understanding the legal and financial aspects, and seeking professional legal guidance are essential steps to ensure a successful acquisition. Falcon Law PC is here to provide expert legal assistance throughout the acquisition process, helping you navigate regulatory compliance, contract negotiations, and other crucial aspects of your corporate purchase. For personalized legal support and guidance, please contact Falcon Law PC at 1-877-892-7778 or via email at

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