Purchase of a Business
Before purchasing a business, a tax evaluation is always required. Questions such as whether to purchase assets or shares, or possibly a hybrid, are important considerations. There are also opportunities to "step up" the cost of underlying assets purchased, to minimize taxes in the future.
A due diligence review of past tax filings may also be a prudent step. We can provide this review and summarize our findings in a report, quickly and efficiently.
Canada does not allow for consolidated income tax returns, so tax planning is often necessary to match the profits from the business with losses from other sources or interest expense on loans taken out to acquire the business. We can advise on this planning and help to implement it after the purchase.
We work closely with legal counsel to coordinate the tax planning with the required legal documentation, and can assist in structuring the financing of the purchase.
We can also assist in negotiating the purchase, structuring creative arrangements if need be, such as earnouts, sale and leaseback transactions, share-for-share exchanges, and management buyouts.