Buying a Canadian Business, eh? An Introduction to a Special Series
We’re often called upon to provide Canadian legal advice to US-based purchasers contemplating the acquisition of a Canadian business. In many transactions, we act directly for the purchaser; in others we’re asked to provide Canadian support to the acquirer’s US legal counsel. There are many similarities between Canadian and US law but if we had a toonie* for each of the important distinctions, we might have enough to buy a Tim Hortons franchise.
Whether you’re a US purchaser or US legal counsel, there are many differences between the two legal regimes that you’ll want to know before delving into the purchase of a Canadian target. Sure, you’ll have to change “labor” to “labour”, “acknowledgment” to “acknowledgement” and “guaranty” to “guarantee” before the target’s Canadian lawyers make these changes on their first mark-up of the purchase agreement. We also like to keep our definitions section at the front of the purchase agreement rather than tucked away in the back. But there are many much more important distinctions between Canadian and US law that ought to be considered in the early stages of the proposed acquisition of a Canadian target.
Over the next several months, we’ll be highlighting some of the most significant of these distinctions in our special series on buying a business in Canada – some of which are considered in greater depth in our publication, Doing Business in Canada 2012. We intend to cover a broad range of areas in this series, including posts relating to general corporate and commercial considerations, antitrust and foreign investment review, tax, employment, real estate and intellectual property. In the meantime, if you’re visiting a target’s business or coming to Canada to attend a closing in July, you can be confident in your decision to leave your skis at home (it rarely snows in Canada in July and the moose would laugh at you).
* Many Americans are familiar with the one-dollar Canadian coin called the “loonie”, but fewer are familiar with the “toonie”, which emerged in 1996 as the Canadian two-dollar coin.
acquisition acquisition of a Canadian business Doing Business in Canada Purchase Agreement US legal counsel US purchaser