Share Purchase vs Asset Purchase in Ontario: What Actually Changes
The distinction between a share purchase and an asset purchase defines the transaction.
In a share purchase, the buyer acquires the company itself, including its assets and liabilities.
In an asset purchase, the buyer selects what is acquired and what is left behind.
This is not a preference. It is a structural decision.
Liabilities follow the shares. In an asset deal, they must be specifically assumed. Contracts may transfer automatically in a share deal but require consent in an asset deal.
Tax treatment also differs.
The structure determines what risks are inherited and how the transaction is executed.