Canada: Taxes In Share Purchase Agreements: Pre-Closing Tax Liabilities
The purchase price for the shares of a target company is typically based on either the target’s financial statements as of a specified date prior to closing or an “averaging” of the historical performance of the business (according to an agreed formula) and often with reference to “EBITDA”1. Such agreed purchase price is typically cash-free and debt-free and assumes that the business will have a customary amount of “working capital” to permit the business […]