To make the choice, you and the buyer must complete the FP-2044-V form, choose with the purchase of a business or part of the business and send it to us. Pension and existing benefits rights must be taken into account when shares of the target company are acquired or if there is, in the context of a wealth acquisition, a collective agreement or an employment contract requiring the realization of such pensions and other benefits. How these pension and benefit rights are treated depends on the circumstances and actual circumstances of the transaction, as well as on interested parties. A buyer should consult with their advisors at an early stage to deal with these issues. As a general rule, dismissal or severance pay and changes to control obligations are incorporated into employment contracts or lease letters. A clear understanding of all redundancy or severance obligations is essential. In order for the choice to be made by the sale of the transaction, the real estate that the buyer imposes on the development of the transaction, but which are not acquired under the sale contract (for example.B. Consumer goods purchased by another source or already in the buyer`s possession) do not exceed 10% of the fair value of all real property required for the activity. In addition, the buyer must be able to manage the same type of transaction that was created or sued by the seller using the property acquired under the sale contract. A buyer should carefully consider all provisions relating to dismissal or severance pay (and potential performance risks) in all employment contracts, recruitment letters, variable compensation or incentive plans (cash and action-based) and guidelines. A buyer must know whether the change in control provisions or “individual triggers” agreements (caused by the closure, regardless of re-employment) or “double trigger” (only if the employee is not reinstated or terminated within a specified period after closing).
By using a Canadian subsidiary to acquire the assets and carry out the Canadian operations, the subsidiary is responsible for reporting income tax and paying income tax in place of the non-Canadian parent company. The legal due diligence of an asset transaction is generally the same, focusing on issues related to acquired/acquired assets or liabilities. The principles of union laws in Quebec are similar to those of other Canadian provinces. As a general rule, the sale of a business does not nert a certification or collective agreement that remains mandatory for the buyer. However, Quebec legislation is unique in terms of individual employment contracts. The common law distinguishes according to the nature of the transaction: in the case of asset acquisition, it is assumed that employees are dismissed, while in the case of stock purchases, the employment relationship is not affected. Conversely, under Quebec law, whether the transaction is the acquisition of assets or shares of a company, certain employment contracts that were in effect at the time of the sale of the business are automatically maintained with the buyer, provided that the seller`s activities also continue with the buyer. In other words, the sale of a business itself does not sign any employment contract (and is not a serious reason or a good enough reason to do so). Therefore, if an employee`s employment contract is not terminated by the seller prior to the sale of the business, the buyer replaces the seller after the sale and the employee is considered the buyer`s employee. For tax reasons, buyers generally prefer asset transactions (unless the buyer wants to target certain tax attributes of the target), while sellers generally prefer equity transactions.