Sale of Business In Ontario
Question:
Q 6: Under REBBA 2002, a buyer must receive a statement of assets and liabilities, a profit and loss statement and a list of items not included in the sale prior to a binding agreement. Can the purchaser provide a waiver for receipt of this?
Answer:
The Brokerage on behalf of the Seller is to provide:
1) A P& L statement,
2) A Balance Sheet, and
3) A list of what’s included.
If there is a failure to provide the list, THEN, “everything” is included.
Sometimes, there are no financial statements or the Seller is reluctant to provide them. What happens?
The Seller will prepare an Affidavit which will be delivered to the Buyer stating that:
1) there are no statements ,
2) the terms of occupancy or possession (the lease) and
3) the liabilities of the business.
The Buyer will sign a Statement that they saw the Affidavit.
There is no “waiver”. This document simply acknowledges that they saw the Affidavit.
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