This paper considers select tax issues and opportunities in structuring the purchase and sale of a business. In particular, it reviews the relevant considerations when deciding whether to structure a sale as assets or shares, and the tax issues that may arise. Additionally, it discusses how vendors can plan ahead and prepare for a sale in order to maximize after-tax return, including qualifying for the capital gains exemption. It also considers the impact of the repeal of the Eligible Capital Property rules on the structure of a purchase and sale as a hybrid transaction, and uses an example case study to demonstrate the concepts being discussed. Finally, it highlights the restrictive covenant rules relevant to the purchase and sale of a business.

This paper is part of a collection presented at LESA’s Buying and Selling a Business seminar held in Edmonton on March 2, 2017 and in Calgary on March 9, 2017.