Asset Purchase Checklist
Included/
Considered / Not
Applicable
1. /

Date

  • date of agreement

2. / Parties
  • designate all parties as precisely as possible

3. / Definitions
  • define all terms as needed

4. / Obtain background information on business/assets being acquired
  • description of assets being acquired

  • past history of the business

  • background of the owners, directors, officers and key employees

  • copies of any organizational charts, sales, service or policy manuals or catalogues

  • consider necessity for disclosures consents pursuant to and the need toprotect Personal Information pursuant to the requirements of the PersonalInformation Protection and Electronic Documents Act, 2000, c. 5 both for due diligence and transfer purposes.

5. / Intellectual Property
  • details of patents, trade marks, industrial property, etc., of the business and its main competitors

  • any protection for business or product names

  • any legal problems affecting the Corporation or its products

  • obtain assignments of patents, trade marks, leases

  • executory contracts, etc., with consents where required

6. / Contracts
  • details of all outstanding contracts

  • lending agreement

  • leases of real and personal property

  • conditional sale contracts

  • franchise agreements and licenses

7. / Financial Information
  • copies of complete financial statements for a number of past years

  • details of property and equipment (owned or leased)

  • prepaid expenses

  • intangibles

  • proof of payment of taxes

  • unused plant capacity and other production data

  • obtain independent valuations

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8. / Employment Matters
  • details of any collective agreement

  • where employment to be offered to any existing employees, details of

  • personnel contracts (including management, sales, engineering, research, labour)and their salaries, length of service, number, etc

  • fringe benefits, any employee benefit plans and the funding thereof

  • requirements of pension legislation and Employment Standards Act (Ontario), R.S.O. 1990, c. E.14 or other similar legislation

9. / Customers and Suppliers
  • names of domestic customers

  • names of foreign customers

  • copies of any contracts with customers

  • names of all suppliers

  • copies of any supply contracts

  • availability of public services (power, gas, water, transportation and disposal facilities) and raw materials

10. / Competitors
  • description of all competitors, their manufacturing and sales methods

  • advantages and disadvantages of their products and methods

  • percentage of market held by competitors

  • penetration of Canadian market by foreign competitors

  • potential competition

11. / Tax Considerations
  • obtain any appropriate clearance letters and certificates from appropriate tax department(s)

  • obtain clearance certificate from Retail Sales Tax Branch

  • price adjustment claim if valuation of assets assessed by Revenue Canada

12 / Where purchaser is a nonresident of Canada
  • notification, advance ruling certificates, advisory opinions, etc.

  • compliance with Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.)

  • compliance with restrictions and prohibitions contained in special statutes dealing with certain types of business such as financial intermediaries, publishers, communications, aviation, real estate

  • compliance with the Competition Act (Canada), R.S.C. 1985, c. C-34

  • examine any special tax considerations under federal and provincial tax laws and international tax conventions between Canada and country of purchaser

  • will business be operated as a subsidiary

  • determine existence of any local tax incentives

  • examine availability and use of offshore corporations

  • examine legislation restricting imports

  • examine labelling and packaging legislation (bilingual requirements) where materials to be imported

  • examine customs duties and dumping legislation where products imported to Canada

  • visas for foreign personnel working in Canada

  • licensing and qualification requirements for foreign owners

  • extension of foreign employee benefit plans to cover Canadian and other employees on similar basis

13. / Due Diligence/Searches
  • review minute books and corporate records

  • review all material contracts

  • review retail sales tax clearance certificate

  • conduct the following searches:

  • corporate file search

  • Personal Property Security Act (Ontario), R.S.O. 1990, c. P.10

  • Bank Act (Canada), S.C. 1991, c. 46

  • bankruptcy searches (local)

  • Bulk Sales Act (Ontario), R.S.O. 1990, c. B.14

  • sheriff's executions

  • Land Titles Act, R.S.O. 1990, c. L.5 and Registry Act (Ontario), R.S.O. 1990, c. R.28

  • Workplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A

  • TradeMarks Act, R.S.C. 1985, c. I-13

  • licensing statutes

  • Revenue Canada

  • out of Province Searches

  • Truck Transportation Act, R.S.O. 1990, c. T.22

  • Environmental Protection Act (Ontario), R.S.O. 1990, c. E.19

  • Mining Act (Ontario), R.S.O. 1990, c. M-14

  • Canada Shipping Act, R.S.O. 1985, c. S-9

  • Retail Sales Tax Act (Ontario), R.S.O. 1990, c. R.31

  • Patent Act (Ontario), R.S.C. 1985, c. P-4

  • Railway Act (Ontario), R.S.O. 1990, c. 331

  • Ontario Petroleum Resources Act, R.S.O. 1990, c. P.12

  • any other necessary searches

  • all standard realty searches

  • consider consider necessity for disclosures consents pursuant to and the need to protect Personal Information pursuant to the requirements of the Personal Information Protection and Electronic Documents Act, 2000, c. 5 both for due diligence and transfer purposes

14. / Buyer's/Agent's Commissions
  • amount of commissions and who pays

  • determine whether agent's or broker's commission is conditional on completion of the transaction

15. / Insurance
  • confirm fire, motor vehicle and other insurance and check adequacy thereof

16. / PreClosing
  • check compliance with all terms of agreement immediately prior to closing

  • report to client with all documents

  • update closing checklist indicating what party will table what documents

  • attend closing meeting

17. / Post Closing
  • filing requirements under Bulk Sales Act (Ontario), R.S.O. 1990, c. B.14

18. / General Contract Provisions
  • term of agreement

  • arbitration clause

  • notice procedure

  • additional document

  • counterparts

  • time of the essence

  • entire agreement

  • enurement

  • currency

  • headings for convenience only

  • governing law

  • gender

  • calculation of time

  • legislation references

  • severability

  • termination of prior agreements

  • assignability

  • facsimile clause

19. /

Signatures

  • who has signing authority

  • corporate seal

20. /

Schedules

  • include all required Schedules

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