Asset Sale, Share Sale and Real Estate in an Alberta Business Transaction

1. Begin with the legal parties and current ownership

Map the operating entity, shareholders, property owner, landlord, related companies, lenders and parties to material contracts. Confirm who owns each asset and which person has authority to negotiate and sign.

A trade name, brand or storefront is not necessarily the legal seller. Corporate, title and personal-property searches are evidence inputs for counsel, not substitutes for legal conclusions.

• Operating entity
• Shareholders
• Property owner
• Landlord
• Asset owners
• Signing authority

2. Understand the structural distinction

In a share sale, the purchaser acquires shares of the corporation; in an asset sale, identified assets and assumed obligations move under the agreements. Owned real estate may be included in an asset transaction, sold separately, retained and leased, or held in another entity.

A leasehold location requires a lease assignment, sublease, new lease or other landlord-approved path. Counsel should define the structure and consistency among all agreements.

3. Identify the licensed real estate component

RECA publishes the governing Real Estate Act, which defines real estate to include real property and leasehold property and requires an appropriate licence for trading in real estate unless an exemption applies. Map the property sale or lease activity separately from the operating-business, asset or share work.

The real estate professional should clearly state the licensed mandate and should not imply authority to provide legal, tax, accounting or securities advice.

4. Build the asset and obligation schedule

List land, buildings, equipment, vehicles, inventory, receivables, cash, deposits, intellectual property, domain names, phone numbers, customer and supplier contracts, licences, warranties and goodwill. Identify excluded assets and proposed assumed liabilities separately.

Use serial numbers, title documents, lease schedules and registry results where applicable. Personal Property Registry searches can identify registered interests in goods or against legal debtor names, but counsel should interpret results and closing requirements.

5. Reconcile price and tax allocation

CRA explains that agreements may allocate price among inventory, assets and goodwill and that a business disposition can produce capital-cost-allowance and other tax consequences. An allocation should reflect the negotiated transaction and professional advice, not a unilateral marketing convenience.

Real property, equipment, inventory, goodwill and shares can carry different consequences for seller and buyer. Each party needs its own legal and tax advice before committing to a structure or allocation.

6. Test the GST/HST election rather than assume it

CRA describes a possible joint election for a qualifying sale of a business or part of a business, including an all-or-substantially-all test generally framed as 90% or more of property reasonably necessary to carry on the business. Conditions, registration status, exclusions and filing requirements matter.

The election is not automatic and does not make every supply non-taxable. The parties' tax advisors should determine eligibility, allocation, filing and treatment of real property and other exceptions.

7. Coordinate consents and continuity

List lender, landlord, franchisor, customer, supplier, regulator, licence, permit, employee, insurer and other consents or notices. State which are conditions, closing deliverables or post-closing items.

A share sale may preserve the contracting entity but can still trigger change-of-control rights. An asset sale can require assignments, new accounts and new permits. Neither structure guarantees continuity.

8. Align diligence with the selected structure

Share transactions can require review of the corporation's history, obligations, taxes, litigation and records. Asset transactions require precise ownership, condition, lien, assignment and assumed-liability work. Real estate requires its own title, planning, physical, environmental and occupancy review.

Build separate workstreams with one dependency calendar so a property condition, lease consent or regulatory approval cannot quietly diverge from the business closing.

9. Preserve privacy and deal control

Limit early disclosure to what a qualified buyer needs. Alberta's PIPA permits limited personal-information disclosure for a business transaction under statutory requirements; counsel or privacy advisors should define the process for employee and customer records.

Use consistent NDAs, access levels, document versions, Q&A responses and correction notices across business and property teams.

10. Record scope and professional responsibility

The marketing package should state the contemplated structure, real estate component, included assets, exclusions, reliance limits and items subject to professional confirmation. If structure remains open, say so rather than mixing incompatible assumptions.

This guide is educational and is not legal, tax, accounting, securities, privacy, employment, appraisal, business-valuation or regulatory advice. Independent advisors should structure and document the transaction.