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Sukhi Hansra October 12, 2026
Mergers and acquisitions is the umbrella over every transaction that moves a business from one set of hands to another, covering share purchases, asset purchases, amalgamations, and the strategic acquisitions where one operating company absorbs another. Most Ontario M&A happens between private companies, at prices from the hundreds of thousands to the tens of millions, and the legal work decides how much of the value survives the transfer.
We act on both sides of these transactions, for buyers and sellers in Toronto, across the Greater Toronto Area, and throughout Ontario. We also work with clients based outside the province on transactions involving Ontario businesses. Our principal lawyer has owned four businesses himself, which changes how we read a deal. We read it as a business decision whose risks live in specific clauses rather than as paperwork to process.
A mergers and acquisitions lawyer runs the legal side of a business sale or purchase, from the first structural decision through to the closing documents. The work starts well before there is an agreement to sign. It covers whether the transaction should be structured as a share purchase or an asset purchase, what the buyer is actually acquiring, which liabilities travel with it, and how the price is protected between signing and closing.
In practice the role has four parts. Structuring the transaction so that the tax and liability consequences match what the client actually wants. Running or responding to due diligence, which is the investigation of everything the price assumes to be true. Drafting and negotiating the purchase agreement, where the representations, warranties, and indemnities decide who carries which risk. Then closing, which means the consents, registrations, and deliverables that make the transfer legally effective.
Business owners often ask whether a smaller transaction really needs a mergers and acquisitions lawyer. The size of the deal changes the amount of work rather than the list of things that can go wrong. A purchase at the lower end of the range above can carry the same unassignable lease, the same employee entitlements, and the same tax exposure as a transaction ten times its size.
The biggest deal-killer, in our experience, is hidden costs and liabilities, meaning obligations the price never accounted for. The table starts there, and the rest follow:
| Deal-killer | When it surfaces | What prevents it |
|---|---|---|
| Hidden costs and liabilities (the biggest of them) | During diligence if you look; after closing if you did not | Diligence scoped to where liabilities actually hide (below), and indemnities with real money behind them |
| A disclosed problem that reprices the deal | Mid-diligence, after exclusivity has spent your leverage | Seller-side preparation; buyer-side diligence that starts with the highest-risk categories first |
| Financing conditions that can’t clear | Weeks before closing | Financing terms tested against the deal’s real numbers before the letter of intent fixes the price |
| Change-of-control consents | Whenever someone finally reads the key contracts | The consent sweep, done during diligence rather than discovered at closing |
| Working-capital disputes | After closing, when the true-up math lands | A working-capital definition negotiated as carefully as the price it adjusts |
| Key people walking | Announcement day | Retention terms and communication planned as part of the deal, not after it leaks |
The liabilities that reprice deals rarely sit on the balance sheet under a label. The recurring hiding places:
Every one of these has a diligence question that surfaces it and an indemnity that prices it. Skipping the question does not remove the liability; it just moves the discovery date past closing.
Once diligence has surfaced the risks, the definitive agreement allocates them, and its machinery has a logic worth understanding before you negotiate it:
Suppose the target company runs on twelve significant contracts. Diligence finds three with change-of-control or anti-assignment clauses. They are the premises lease, the largest customer’s supply agreement, and a software licence the operations depend on. None of the three is a deal-killer by itself, but each is now a third party whose consent your closing depends on, each has its own timeline, and the landlord wants something for signing. If the sweep happens in week three of diligence, it costs a few weeks of parallel consent-chasing. If they are found at closing instead, the same three clauses mean a delayed deal, a renegotiated price, or a buyer who technically closed into a breach. The sweep is unglamorous work, and it is regularly where a deal’s calendar and price are actually decided.
The headline price is rarely the final price, and the mechanisms in between are where sophisticated deals allocate their uncertainty:
Every transaction starts with a written quote, itemized by stage, with the tasks that could increase fees named in advance. That is our no surprise billing policy. Deal work of this kind is quoted after we understand the structure, and you will have the number before you commit to anything. Learn how our fees work.
An acquisition is one company or person buying another business, which continues or is absorbed at the buyer’s choice. A merger in the Canadian legal sense is an amalgamation, in which two or more corporations combine by statute into one continuing corporation. Most “mergers” in conversation are legally acquisitions; the distinction matters because the statutory paths differ.
For private-company transactions in Ontario, they should be the same person. What matters is transaction experience, because deal structuring, due diligence discipline, and purchase-agreement drafting are the craft, whatever the label. Large public-company M&A adds securities-law layers that are genuinely a different practice.
Based on our own transaction history, most private-company deals close in 3 to 6 months from letter of intent. Diligence findings, financing conditions, and third-party consents are the usual sources of delay, and a deal with a pre-organized seller moves visibly faster.
The recurring ones are tax exposure that transfers with the shares, accrued employee severance entitlements, secured obligations registered against the assets, warranty and service commitments inside customer contracts, and consent fees triggered by the transaction itself. Diligence exists to surface each of these, and indemnities exist to price the ones that surface late.
Diligence surprises and financing, in that order. A liability the seller did not disclose reprices or ends the transaction; a financing condition that cannot be cleared ends it politely. The deals that close are usually the ones where both sides prepared before the letter of intent instead of after.
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We structure the transaction so the tax and liability consequences match what you want, run or respond to the due diligence that tests what the price assumes, draft and negotiate the purchase agreement where the representations and indemnities decide who carries which risk, and close it, which means the consents and registrations that make the transfer legally effective.
Yes, and it is a common way for an owner to exit while leaving the business in hands that already know it. The structure usually has to solve a funding problem first, because managers rarely have the cash on hand and a conventional bank-backed buyout is not always available. Planning the flow of funds around that constraint is most of the work.
Reviewed by Sukhi Hansra, Business and Franchise Lawyer at Hansra Law.
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