Toronto business lawyer for owners selling a business. From the letter of intent through due diligence, negotiation, and closing — Jonathan protects your interests so you walk away with what you earned.
· Reviewed by Jonathan Kleiman, J.D.
Jonathan Kleiman is a Toronto business lawyer who represents owners selling a business — whether you are selling the assets, the shares, or the entire operation.
Selling a business is one of the most significant financial transactions you will ever complete. The purchase agreement, the representations you make, the indemnification you accept, and the post-closing obligations you agree to will follow you for years after the deal closes. Jonathan makes sure the terms protect you.
Every engagement begins with a free 30-minute consultation.
In almost every business sale, the buyer's lawyer drafts the purchase agreement. That agreement is written to protect the buyer — not you. Every clause, every representation, every indemnity is designed to shift risk onto the seller.
Without your own lawyer reviewing and negotiating those terms, you may be agreeing to liabilities that extend well beyond closing day.
Business sales in Ontario are governed by the Business Corporations Act, the Bulk Sales Act, the Employment Standards Act, the Retail Sales Tax Act, and other provincial and federal statutes that impose specific obligations on sellers. A Toronto business lawyer ensures compliance at every stage.
Whether you sell assets or shares has major tax consequences. The wrong structure can cost you tens or hundreds of thousands of dollars. Jonathan works alongside your accountant to structure the sale in the most tax-efficient way available under Canadian tax law.
Thinking about buying instead? Read about buying a business in Toronto or explore contract drafting and review for the agreements involved.
The work of selling a business begins long before a buyer appears. Jonathan helps you get your house in order so you are ready when the right offer comes.
Minute books, articles of incorporation, shareholder resolutions, and corporate records reviewed and updated. Buyers and their lawyers will scrutinize these — they need to be clean.
Existing contracts with customers, suppliers, employees, and landlords reviewed for assignment and change-of-control provisions that could complicate or block the sale.
Outstanding litigation, regulatory issues, tax arrears, and contingent liabilities identified and addressed before the buyer discovers them during due diligence.
Employment agreements, termination obligations, and Employment Standards Act compliance reviewed. Whether employees transfer to the buyer or are terminated affects the deal structure and cost.
A letter of intent (LOI) or term sheet outlines the key terms of the proposed sale — purchase price, sale structure, conditions, exclusivity period, and closing timeline.
While most LOIs are non-binding, the exclusivity and confidentiality provisions typically are. Jonathan reviews every LOI before you sign to make sure you are not locked into unfavourable terms before negotiation even begins.
In an asset sale, the buyer purchases specific business assets — equipment, inventory, intellectual property, customer lists, goodwill, and assigned contracts — while the seller retains the corporate entity and any excluded liabilities.
Asset sales are the most common structure for small and mid-sized business sales in Toronto. They allow the buyer to select what they want and leave behind what they do not.
Jonathan drafts and negotiates asset purchase agreements that clearly define what is included, what is excluded, and what happens if something falls through the cracks.
In a share sale, the buyer purchases the shares of the corporation — acquiring everything the company owns and everything it owes. The corporate entity continues, but ownership changes hands.
Share sales can be more tax-efficient for the seller — particularly where the lifetime capital gains exemption applies to qualified small business corporation shares. Jonathan coordinates with your accountant to determine whether a share sale is the right structure.
The representations and warranties in a share purchase agreement are typically broader than in an asset sale because the buyer is acquiring the entire company, including its history.
Due diligence is the buyer's investigation of your business before closing. The buyer's lawyers and accountants will request access to financial records, contracts, employee files, tax returns, corporate records, intellectual property, litigation history, and regulatory filings.
Jonathan prepares you for this process:
The purchase agreement is where the real negotiation happens. Jonathan negotiates the terms that matter most to sellers:
Every representation you make about the business — its financials, its contracts, its compliance, its litigation history — is a promise that can come back as a claim after closing. Jonathan narrows these representations to what is accurate and limits your exposure with materiality qualifiers and knowledge qualifiers.
The indemnification section determines how much you can be held responsible for after the sale closes. Jonathan negotiates indemnity caps, baskets (deductibles), survival periods, and carve-outs to limit your post-closing financial exposure.
Buyers sometimes propose holding back a portion of the purchase price or tying part of the price to post-closing performance. Jonathan negotiates the amount, release conditions, and dispute mechanisms so you are not at the buyer's mercy.
Free 30-minute consultation. Get an honest assessment of what to prepare.
As the seller, protecting yourself after closing is just as important as getting the right price. Jonathan builds protections into every business sale agreement:
Closing day involves the exchange of signed documents, payment of the purchase price, transfer of assets or shares, and fulfilment of all closing conditions. Jonathan prepares and reviews every closing document:
Most business sales include a transition period where the seller assists the buyer with operations, customer introductions, supplier relationships, and knowledge transfer. Jonathan negotiates these terms so they are clearly defined and time-limited:
If the buyer needs your help after closing, the terms should be in writing — including scope, duration, compensation, and what happens if the buyer extends the period. Jonathan structures transition arrangements that are fair to both sides.
Ontario courts enforce non-compete clauses in business sales more readily than in employment contexts — but the restrictions must still be reasonable in scope, duration, and geography. Jonathan negotiates non-compete terms that protect the buyer's investment without unnecessarily limiting your future.
Working capital adjustments, earnout calculations, and inventory true-ups are common sources of post-closing disputes. Jonathan drafts clear adjustment mechanisms and dispute resolution procedures to minimize friction after the deal closes.
Jonathan earned his B.A. (with distinction) at McGill University and his J.D. at Queen's University. He has been a member of the Law Society of Ontario since 2011 and has represented Toronto business owners through every stage of selling a business.
Selling your business is not something you do twice. Your lawyer should treat it with the seriousness it deserves — and be available when you have questions, not two weeks later.
Jonathan manages every stage of the transaction:
Corporate records, contracts, and financials organized and reviewed. Issues identified and addressed before the buyer's due diligence begins.
Letter of intent reviewed and negotiated. Key deal terms — price, structure, conditions, exclusivity — locked down before the purchase agreement is drafted.
Purchase agreement negotiated while due diligence runs in parallel. Jonathan manages disclosure, responds to buyer requests, and protects your position.
All closing documents prepared, reviewed, and executed. Payment confirmed, assets or shares transferred, and post-closing obligations clearly defined.
If you are thinking about selling — or already have a buyer at the table — the time to involve a lawyer is now, not after you've signed something you can't undo.
Call 416-554-1639 or book a free consultation.
The questions Toronto business owners ask most often about selling a business, the legal process, costs, and working with a business sale lawyer.
Legal fees depend on deal complexity, sale structure, and the number of agreements involved. Jonathan provides a fee estimate after reviewing the transaction details during a free 30-minute consultation.
Many straightforward sales are quoted on a flat-fee or capped-fee basis.
In an asset sale, the buyer purchases specific business assets — equipment, inventory, contracts, goodwill — while the seller retains the corporate entity and any excluded liabilities.
In a share sale, the buyer purchases the shares of the corporation, acquiring everything the company owns and owes. Each structure has different tax, liability, and contractual implications.
There is no legal requirement, but selling a business without a lawyer is risky. A business sale involves purchase agreements, representations and warranties, indemnification clauses, non-compete obligations, tax elections, lease assignments, and employee matters.
A single overlooked clause can cost you more than the legal fees would have.
From signed letter of intent to closing, most business sales take between 60 and 120 days.
The timeline depends on the complexity of due diligence, third-party approvals, financing conditions, and the number of open negotiation points.
Due diligence is the buyer's investigation of the business before closing. The buyer will review financial records, contracts, employee arrangements, leases, intellectual property, litigation history, tax filings, and regulatory compliance.
Jonathan prepares you for this process and ensures you only disclose what is required under the agreement.
Post-closing disputes are governed by the indemnification provisions in the purchase agreement. Jonathan drafts these clauses to protect you — including survival periods, indemnity caps, baskets, and dispute resolution mechanisms.
If a breach occurs, he pursues resolution through negotiation or litigation.
Yes. In an asset sale, you can exclude real property from the transaction and enter into a commercial lease with the buyer.
This is common when the property has appreciated significantly or when the seller wants to retain a passive income stream. Jonathan structures the sale and lease terms together.
A non-compete clause restricts the seller from starting or working in a competing business for a defined period and geographic area after the sale.
Ontario courts enforce non-competes in business sales more readily than in employment contexts, but the scope must be reasonable. Jonathan negotiates terms that protect the buyer's investment without unnecessarily limiting your future.
Get the legal protection you need before you sign. Free 30-minute consultation with a Toronto business lawyer who represents sellers.