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Small Business Stock Purchase Agreement Template for Canada

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Key Requirements PROMPT example:

Small Business Stock Purchase Agreement

"I need a Small Business Stock Purchase Agreement for acquiring 100% of shares in a Canadian software development company, with closing scheduled for March 15, 2025, where the seller will make a clean exit with no ongoing involvement."

Document background
The Small Business Stock Purchase Agreement is a crucial document used in Canadian business transactions when transferring ownership of shares in small corporations. It serves as the primary contract between the selling shareholder(s) and the purchaser, documenting the essential terms and conditions of the share transfer. This agreement is particularly suited for transactions involving Canadian small businesses, typically those with fewer shareholders and less complex corporate structures. The document ensures compliance with both federal regulations (such as the Canada Business Corporations Act) and relevant provincial corporate laws, while addressing key aspects such as purchase price, payment terms, representations and warranties, and closing conditions. It's designed to be more streamlined than agreements used for larger corporations while still providing necessary legal protections for all parties involved.
Suggested Sections

1. Parties: Identification of the seller(s), buyer(s), and the corporation whose shares are being sold

2. Background: Context of the transaction, including brief description of the business and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Purchase and Sale: Core transaction terms including number of shares, purchase price, and payment terms

5. Closing: Timing, location, and mechanics of the closing process

6. Representations and Warranties of the Seller: Seller's statements about the company, shares, and authority to sell

7. Representations and Warranties of the Buyer: Buyer's statements about authority and ability to purchase

8. Covenants: Actions parties must take or refrain from taking before and after closing

9. Conditions Precedent: Conditions that must be met before closing can occur

10. Survival: Which provisions continue after closing and for how long

11. Indemnification: Protection against losses from breaches or misrepresentations

12. General Provisions: Standard clauses including notices, amendments, governing law, etc.

Optional Sections

1. Non-Competition and Non-Solicitation: Restrictions on seller's future business activities, typically included when seller is a key person in the business

2. Employee Matters: Provisions regarding retention, benefits, or changes to employee arrangements, needed if there are key employees

3. Tax Matters: Specific tax-related provisions and allocations, important for complex tax situations

4. Environmental Matters: Environmental representations and obligations, needed if business has environmental risks

5. Transition Services: Services provided by seller post-closing, included when seller's ongoing involvement is needed

6. Intellectual Property: Detailed IP provisions, needed if business has significant IP assets

7. Real Estate: Property-related provisions, needed if business owns/leases significant real estate

Suggested Schedules

1. Schedule A - Purchased Shares: Detailed description of shares being purchased including share certificates

2. Schedule B - Purchase Price Allocation: Breakdown of purchase price allocation for tax purposes

3. Schedule C - Company Financial Statements: Recent financial statements of the business

4. Schedule D - Material Contracts: List and copies of important business contracts

5. Schedule E - Assets Inventory: List of major assets owned by the business

6. Schedule F - Intellectual Property: List of IP assets and registrations

7. Schedule G - Employee Information: List of employees and their key terms of employment

8. Schedule H - Liabilities and Obligations: List of all known liabilities and ongoing obligations

9. Appendix 1 - Closing Checklist: List of all documents and actions required for closing

10. Appendix 2 - Form of Resignation: Template for director/officer resignations

11. Appendix 3 - Release Forms: Template for any required releases

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses






























Relevant Industries

Professional Services

Retail

Technology

Manufacturing

Hospitality

Healthcare

Construction

Consulting

E-commerce

Real Estate

Food Services

Digital Media

Agriculture

Transportation

Education Services

Relevant Teams

Legal

Finance

Executive

Corporate Development

Mergers & Acquisitions

Business Development

Accounting

Compliance

Risk Management

Corporate Governance

Relevant Roles

Business Owner

CEO

Managing Director

Corporate Lawyer

Business Lawyer

CFO

Financial Controller

Business Development Manager

Investment Manager

M&A Advisor

Corporate Secretary

Legal Counsel

Small Business Advisor

Accountant

Business Broker

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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