[{"data":1,"prerenderedAt":525},["ShallowReactive",2],{"document-share-purchase-agreement-deemed-dividend-D342":3},{"document":4,"label":23,"preview":11,"thumb":24,"thumb600":25,"description":5,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":26,"breadcrumb":30,"related":38,"customDescModule":181,"customdescription":6,"mdFm":182,"mdProseHtml":524},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":15,"keywords":22},"SHARE PURCHASE AGREEMENT This Share Purchase Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [FIRST PARTY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [SECOND PARTY NAME] (the \"Testamentary Executor / Seller\"), an individual with his/her main address located at: [COMPLETE ADDRESS] AND: [THIRD PARTY NAME] (the \"Purchaser\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Seller is the owner of [NUMBER] common shares in the capital stock of the Corporation (the \"Shares\"); WHEREAS the [COMPANY NAME] hereto have determined that the fair market value of the Shares is [AMOUNT]; WHEREAS the Corporation desires to purchase for cancellation and the Seller desires to sell the Shares; WHEREAS there are no reasonable grounds to believe that: (a) the Corporation is, or would after the payment of the purchase price be, unable to pay its liabilities as they become due, or (b) the realizable value of the Corporation's assets would after said payment be less than the aggregate of its liabilities and the amounts required for payment on a redemption or in a liquidation of all shares the holders of which have the right to be paid prior to the holders of the Shares; WHEREAS the aforesaid purchase will result in a deemed dividend of [AMOUNT] for the purposes of the [COUNTRY] Income Tax [ACT/LAW/RULE]; NOW THEREFORE, IT IS AGREED AS FOLLOWS: SHARES PURCHASED AND PURCHASE PRICE Subject to the terms and conditions set forth in this Agreement, the Corporation hereby purchases for cancellation the Shares from the Seller, hereto present and accepting, and the Seller delivers to the Corporation certificates representing the Shares. The aggregate purchase price for the Shares is [AMOUNT] (the \"Purchase Price\") which the parties consider to be the fair market value of the Shares, payable as set forth in Article [NUMBER] hereof. PAYMENT OF THE PURCHASE PRICE Upon filing by the Corporation of the election as set forth in Article [NUMBER] hereof, the Corporation will issue to the Seller a certificate representing [NUMBER] common shares of the Corporation (the \"Common Shares\") and a promissory note in the amount of [AMOUNT] (the \"Promissory Note\") in full payment of the Purchase Price. The parties hereto determine that the Common Shares and the Promissory Note have a fair market value of and are, in all circumstances of the transaction, the fair equivalent of a consideration payable in cash equal to the fair market value of the Shares. SELLER'S REPRESENTATIONS AND WARRANTIES The Seller represents and warrants to the Corporation that: the Shares are owned by the Seller by good and marketable title; the Seller is a resident of [COUNTRY] for the purposes of the Tax [ACT/LAW/RULE]; ELECTIONS",null,"Share Purchase Agreement Deemed Dividend","4",56,"doc","https://templates.business-in-a-box.com/imgs/1000px/share-purchase-agreement_deemed-dividend-D342.png","https://templates.business-in-a-box.com/imgs/250px/342.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#342.xml",{"title":6,"description":6},[16,19],{"label":17,"url":18},"Finance & Accounting","/templates/finance-accounting/",{"label":20,"url":21},"Buy & Sell Shares","/templates/buy-sell-shares/","share purchase agreement deemed dividend","Share Purchase Agreement Deemed Dividend Template","https://templates.business-in-a-box.com/imgs/400px/342.png","https://templates.business-in-a-box.com/imgs/600px/342.png",[27,16,19],{"label":28,"url":29},"Templates","/templates/",[31,32,35],{"label":28,"url":29},{"label":33,"url":34},"Legal Agreements","/templates/business-legal-agreements/",{"label":36,"url":37},"Equity & Mergers","/templates/equity-and-mergers/",[39,43,47,51,55,59,63,67,71,75,79,83,87,104,120,134,149,162],{"label":40,"url":41,"thumb":42,"extension":10},"Share Donation Agreement","/template/share-donation-agreement-D341","https://templates.business-in-a-box.com/imgs/250px/341.png",{"label":44,"url":45,"thumb":46,"extension":10},"Stock Purchase Agreement","/template/stock-purchase-agreement-D349","https://templates.business-in-a-box.com/imgs/250px/349.png",{"label":48,"url":49,"thumb":50,"extension":10},"Agreement of Purchase and Sale of Shares","/template/agreement-of-purchase-and-sale-of-shares-D322","https://templates.business-in-a-box.com/imgs/250px/322.png",{"label":52,"url":53,"thumb":54,"extension":10},"Employee Share Purchase Plan","/template/employee-share-purchase-plan-D477","https://templates.business-in-a-box.com/imgs/250px/477.png",{"label":56,"url":57,"thumb":58,"extension":10},"Offer to Purchase Shares Agreement","/template/offer-to-purchase-shares-agreement-D334","https://templates.business-in-a-box.com/imgs/250px/334.png",{"label":60,"url":61,"thumb":62,"extension":10},"Purchase Agreement","/template/purchase-agreement-D12670","https://templates.business-in-a-box.com/imgs/250px/12670.png",{"label":64,"url":65,"thumb":66,"extension":10},"Agreement of Purchase and Sale of Shares by Shareholder","/template/agreement-of-purchase-and-sale-of-shares-by-shareholder-D321","https://templates.business-in-a-box.com/imgs/250px/321.png",{"label":68,"url":69,"thumb":70,"extension":10},"Agreement of Purchase and Sale of Shares 2","/template/agreement-of-purchase-and-sale-of-shares-2-D320","https://templates.business-in-a-box.com/imgs/250px/320.png",{"label":72,"url":73,"thumb":74,"extension":10},"Profit Share Agreement","/template/profit-share-agreement-D13523","https://templates.business-in-a-box.com/imgs/250px/13523.png",{"label":76,"url":77,"thumb":78,"extension":10},"Share Subscription Agreement Private_Long Form","/template/share-subscription-agreement-private-long-form-D343","https://templates.business-in-a-box.com/imgs/250px/343.png",{"label":80,"url":81,"thumb":82,"extension":10},"Share Subscription Agreement Venture Capital","/template/share-subscription-agreement-venture-capital-D344","https://templates.business-in-a-box.com/imgs/250px/344.png",{"label":84,"url":85,"thumb":86,"extension":10},"Purchase and Sale Agreement","/template/purchase-and-sale-agreement-D13884","https://templates.business-in-a-box.com/imgs/250px/13884.png",{"description":88,"descriptionCustom":6,"label":89,"pages":90,"size":91,"extension":10,"preview":92,"thumb":93,"svgFrame":94,"seoMetadata":95,"parents":96,"keywords":102,"url":103},"Asset Purchase Agreement Prepared By: Your Name Job Title Phone 555.555.5555 Email info@yourbusiness.com www.yourbusiness.com TABLE OF CONTENTS Pages 1 - INTERPRETATION 6 1.1 Definitions 6 Extended Meanings 9 1.3 Interpretation Not Affected by Headings 9 1.4 Applicable Law 9 1.5 Funds 9 1.6 Financial Documents 9 1.7 Invalidity 10 1.8 Business Day 10 1.9 Preamble 10 2 - PURCHASED ASSETS 10 2.1 Purchased Assets 10 2.2 Excluded Assets 11 2.3 Leases and Retention of Ownership Agreements 12 2.4 Removal of Purchased Assets 12 2.5 Forward Commitments 12 2.6 Assets Used in the Business 12 3 - PURCHASE AND SALE 12 3.1 Purchase Price 12 3.2 Default 13 3.3 Balance of Price 13 3.4 Allocation of the Purchase Price 13 3.5 No Assumption of Liabilities 13 3.6 Payment of Taxes 14 3.7 Adjustments 14 3.8 Net Worth Adjustment 14 3.9 Disagreement Regarding Adjustment of Purchase Price 14 3.10 Escrow of Purchase Price 14 4 - CLOSING AND CONDITIONS PRECEDENT TO THE SALE 15 4.1 Closing Date 15 4.2 Conditions Precedent to Closing in Favor of the Purchaser 15 4.2.1 Corporate Authorization 15 4.2.2 Statements 15 4.2.3 Truth of Representations and Warranties 15 4.2.4 Compliance with Terms and Conditions 15 4.2.5 Governmental Approvals 16 4.2.6 Approval of Purchaser's Counsel 16 4.2.7 Prohibited Actions 16 4.2.8 Delivery of Documents and Title Deeds 16 4.2.9 Legal Opinion of Seller's Counsel 16 4.2.10 Non-Competition Agreements 16 4.2.11 Residence 16 4.2.12 Bulk Sale Affidavit 17 4.2.13 Tax Election Form 17 4.2.14 Powers of Attorney 17 4.2.15 Consents 17 4.2.16 Due Diligence 17 4.2.17 No Substantial Damage or Adverse Change 17 4.2.18 No Adverse Legislation 17 4.2.19 Delivery of Documents 17 4.3 Conditions Precedent to Closing in Favor of the Seller 18 4.3.1 Letter of Credit 18 4.3.2 Truth of Representations and Warranties 18 4.3.3 Compliance with Terms and Conditions 18 4.3.4 Legal Opinion of Purchaser's Counsel 18 4.4 Risk of Loss 18 4.5 Notification 19 5 - REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE PURCHASER 19 5.1 Representations and Warranties of Seller 19 5.1.1 Due Incorporation and Qualification to Carry on Business 19 5.1.2 Binding Nature 19 5.1.3 Title of Assets 19 5.1.4 Options, Commitments 20 5.1.5 No Violation 20 5.1.6 Books and Records 20 5.1.7 Business Conducted in Ordinary Course 20 5.1.8 Leases 21 5.1.9 Uses 21 5.1.10 Work Orders 21 5.1.11 Litigation 22 5.1.12 Proprietary Rights 22 5.1.13 Infringement of Proprietary Rights 22 5.1.14 Compliance with Laws 22 5.1.15 Employment Agreements 23 5.1.16 Labour Unions 23 5.1.17 Labour Practices 23 5.1.18 Pension Plans 23 5.1.19 Restrictive Documents 24 5.1.20 Outstanding Long Term Indebtedness 24 5.1.21 Outstanding Guarantees 24 5.1.22 Insurance 24 5.1.23 Taxes 24 5.1.24 Withholdings 25 5.1.25 Condition of Purchased Assets 25 5.1.26 Clients and Supplies 25 5.1.27 Vacation Pay 25 5.1.28 Residence 25 5.1.29 Knowledge 25 5.1.30 Liabilities 26 5.1.31 Inventories 26 5.1.32 Financial Statements 26 5.1.33 Absence of Certain Developments 26 5.1.34 No Material Adverse Change 27 5.1.35 Other Agreements 27 5.1.36 Environmental Matters 28 5.1.37 Reliance 29 5.1.38 Evidence 29 5.1.39 Standard of Conduct 29 5.2 Representations and Warranties of the Purchaser 29 5.2.1 Due Incorporation 29 5.2.2 Binding Nature 29 5.2.3 No Violation 29 5.3 Survival 30 5.4 Indemnification of the Purchaser 30 5.5 Warranty Work 30 6 - EMPLOYEES 31 6.1 List of Non-Unionized Employees 31 6.2 Employment to Non-Unionized Employees 31 6.3 Claims by Non-Unionized Employees 31 6.4 Pension Plan for Employees 31 6.5 Assumption of Collective Agreement 32 6.6 List of Unionized Employees 32 6.7 Offers to Unionized Employees 32 6.8 Short Term and Long Term Disability 33 6.9 Benefit Plans 33 7 - MUTUAL COOPERATION 33 7.1 Conduct of Business Prior to Closing 33 (a) Conduct Business in Ordinary Course 33 (b) Continue Insurance 33 (c) Perform Obligations 33 7.2 Access for Investigation Prior to Closing 33 7.3 Actions to Satisfy Closing Conditions 34 7.4 Transfer of Purchased Assets 34 7.5 Assistance in Judicial Claims 35 7.6 Collection of Receivables 35 7.7 Accounts Receivable 35 7.8 Differentiation of Products 36 8 - MISCELLANEOUS 36 8.1 Successors and Assigns 36 8.2 Brokers 36 8.3 Legal Fees 36 8.4 Public Announcement 36 8.5 Entire Agreement 36 8.6 Notices 37 8.7 Time of Essence 37 8.8 Counterparts 37 9 - GUARANTEE 37 9.1 Intervention of the Guarantor 37 9.2 Indulgence 38 9.3 Disability of Purchaser 38 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Purchaser\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST PART] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND PART] (the \"Seller\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Seller carries on the business of [NUMBER] WHEREAS the Seller has agreed to sell and the Purchaser has agreed to purchase certain assets relating to the Business upon the terms and conditions set forth in this Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS HEREIN CONTAINED AND OTHER GOOD AND VALUABLE CONSIDERATION, THE [COMPANY NAME] HERETO AGREE AS FOLLOWS: INTERPRETATION Definitions Unless the subject matter or context otherwise requires: \"Affiliate\" has the meaning ascribed to the term \"affiliated corporations\" in the [COUNTRY Business Corporations Act]. \"Associate\" has the meaning ascribed to the term \"associate\" in the [COUNTRY Business Corporations Act]. \"Balance of Price\" has the meaning ascribed thereto in Section 3.1.2. \"Books and Records\" means any books and records (originals or copies thereof) of Seller relating exclusively to the Business including, without limitation, books and records relating to the purchase materials and supplies, the manufacture, assembly and processing of products, sales of products, dealings with customers and franchises, invoices, customer lists, mailing lists, suppliers lists, trademarks and trade names, financial records, personnel records (to the extent permitted by law) and taxes (excluding Seller's income tax and other tax records unrelated to the Business).","Asset Purchase Agreement","37",259,"https://templates.business-in-a-box.com/imgs/1000px/asset-purchase-agreement-D928.png","https://templates.business-in-a-box.com/imgs/250px/928.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#928.xml",{"title":6,"description":6},[97,99],{"label":33,"url":98},"business-legal-agreements",{"label":100,"url":101},"Purchase & Sale Agreements","purchase-sale-agreement","asset purchase agreement","/template/asset-purchase-agreement-D928",{"description":105,"descriptionCustom":6,"label":106,"pages":107,"size":108,"extension":10,"preview":109,"thumb":110,"svgFrame":111,"seoMetadata":112,"parents":114,"keywords":113,"url":119},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. 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INTERPRETATION 5 1.1 Definitions 5 1.2 Generally Accepted Accounting Principles 7 1.3 Headings and References 7 1.4 Extended Meanings 7 1.5 Schedules 7 1.6 Currency 7 1.7 Tender 7 1.8 Performance on Holidays 7 1.9 Calculation of Time 7 1.10 Ordinary Course 7 1.11 \"Material\" and \"Materially\" Defined 7 2. PURCHASE AND SALE 7 2.1 Purchase and Sale and Purchase Price 7 2.1.1 Term and Conditions 7 2.1.2 The Purchase Price shall be paid and satisfied as follows: 7 2.2 Adjustments 7 2.2.1. Net Worth Determination 7 2.2.2. Final Determination of Purchase Price 7 2.2.3. Disputes 7 2.3 Closing 7 2.4 Allocation of Purchase Price 7 2.5 General Adjustments 7 2.6 Accounts Receivable 7 2.7 Liabilities Not Assumed 7 2.8 Transfer Taxes 7 2.9 Non-Assignable Contracts 7 2.10 Increase in Rent on Assignment 7 3. REPRESENTATIONS AND WARRANTIES 7 3.1. Representations and Warranties of the Vendor 7 3.1.1 Corporate Matters 7 3.1.2 Title to Purchased Assets 7 3.1.3 No Options 7 3.1.4 The Financial Statements 7 3.1.5 Undisclosed Liabilities 7 3.1.6 Absence of Changes 7 3.1.7 Absence of Unusual Transactions 7 3.1.8 Tax Matters 7 3.1.9 Books and Records 7 3.1.10 Leases, Material Contracts, etc. 7 3.1.11 Accounts Receivable 7 3.1.12 Consents, Approvals, Etc. 7 3.1.13 Absence of Guarantees 7 3.1.14 Restrictions on Business 7 3.1.15 Absence of Conflicting Agreements 7 3.1.16 Compliance with Applicable [YOUR COUNTRY LAW] 7 3.1.17 Employees 7 3.1.18 Collective Agreements 7 3.1.19 Benefit Plans 7 3.1.20 Litigation 7 3.1.21 Insurance 7 3.1.22 Leases 7 3.1.23 Premises 7 3.1.24 No Expropriation 7 3.1.25 Leased Equipment 7 3.1.26 Licenses 7 3.1.27 Intellectual Property Rights 7 3.1.28 Assets 7 3.1.29 Inventories 7 3.1.30 Forward Commitments 7 3.1.31 Copies of Documents 7 3.1.32 Residency 7 3.1.33 Environmental Matters 7 3.1.34 Occupational Health and Safety 7 3.1.35 Workers' Compensation 7 3.1.36 Disclosure 7 3.1.37 Obligations to Customers 7 3.1.38 Retail Outlets 7 3.2. Representations and Warranties of the Purchaser 7 3.2.1 Incorporation 7 3.2.2 Corporate Power and Due Authorization 7 3.2.3 Enforceability of Obligations 7 3.2.4 Absence of Conflicting Agreements 7 3.2.5 Consents and Approvals 7 3.3. Interpretation 7 3.4. Commission 7 3.5. Qualification of Representations and Warranties 7 3.6. Non-Waiver 7 3.7. Survival of Representations and Warranties of the Vendor 7 3.8. Survival of Representations and Warranties of Purchaser 7 3.9. Knowledge of the Vendor 7 4. OTHER COVENANTS OF THE [COMPANY NAME] 7 4.1. Conduct of Business Prior to Closing 7 4.2. Conduct Business in Ordinary Course 7 4.3. Contracts 7 4.4. Continue Insurance 7 4.5. Comply with [YOUR COUNTRY LAW] 7 4.6. Taxes 7 4.7. Employees 7 4.8. Material Changes 7 4.9. Liens 7 4.10. Action by Vendor 7 4.11. Capital Expenditures 7 4.12. [SPECIFY] Claim 7 4.13. Conduct of Business Prior to Closing 7 4.14. Lease Consents and Estoppel Certificates 7 4.15. Consents and Waivers 7 4.16. Access for Investigation 7 4.17. Delivery of Books and Records 7 4.18. Accounts Receivable 7 4.19. Discharge of Obligations 7 4.20. Cooperation 7 4.21. Employees 7 4.21.1. Offer of Employment 7 4.21.2. Employment Process 7 4.21.3. Indemnification for Severance Claims of Non-Hired Employees 7 4.21.4. Claims Re: Employment Prior to Closing 7 4.21.5. Benefit Plans 7 4.21.6. Termination after Time of Closing 7 4.22. Pension Plan for Employees 7 4.23. Actions to Satisfy Closing Conditions 7 4.24. Disclosure 7 4.25. Injunctions 7 4.26. Action by the Vendor 7 4.27. Competition Act 7 4.28. Bulk Sales Legislation and Provincial Legislation 7 4.29. Consignment Goods and Contractual Rights 7 4.30. [DATE] Financial Statements 7 4.31. Purchaser Radius Clauses 7 5. INDEMNIFICATION 7 5.1 Definitions 7 5.2 Indemnification by the Vendor 7 5.3 Indemnification by the Purchaser 7 5.4 Notice of and the Defense of Third Party Claims 7 5.5 Assistance for Third Party Claims 7 5.6 Settlement of Third Party Claims 7 5.7 Direct Claims 7 5.8 Failure to Give Timely Notice 7 5.9 Payment and Interest 7 5.10 Limitation 7 5.11 Rights in Addition 7 5.12 Survival 7 5.13 Subsequent Recovery 7 5.14 Subrogation 7 5.15 Letter of Credit 7 5.16 Notices to Escrow Agent 7 6. CONDITIONS PRECEDENT 7 6.1 Purchaser's Conditions 7 6.2 Accuracy of Representations and Performance of Covenants 7 6.3 Consents to Assignments 7 6.4 No Material Adverse Change 7 6.5 Litigation 7 6.6 Receipt of Closing Documentation 7 6.7 Non-Competition Agreement 7 6.8 Opinion of Counsel for Vendor 7 6.9 Approval of Board of Directors 7 6.10 Management Agreement 7 6.11 Space and Facilities Agreement 7 6.12 Trade Mark License Agreement 7 6.13 Trade Mark Assignment 7 6.14 Cancellation of Certain Agreements 7 6.15 Environmental Audit 7 6.16 Escrow Agreement 7 6.17 Minimum Number of Leases 7 6.18 Vendor's Conditions 7 6.18.1. Accuracy of Representations and Performance of Covenants 7 6.18.2. Litigation 7 6.18.3. Opinion of Counsel for Purchaser 7 6.18.4. Competition Act 7 6.18.5. Minimum Number of Leases 7 6.18.6. Approval of [SPECIFY] Board of Directors 7 6.18.7. Escrow Agreement 7 6.18.8. Management Agreement 7 6.19 Waiver 7 6.20 Failure to Satisfy Conditions 7 6.21 Destruction or Expropriation 7 7. POST CLOSING OPERATIONS 7 7.1 Failure to Obtain Consent to Assignment of Lease 7 7.1.1. If with respect of any Lease described in Schedule [SPECIFY], the Vendor is unable to obtain any necessary consent, substantially in form or forms approved or deemed approved pursuant to subsection 4.1.10, to the assignment thereof to the Purchaser as herein contemplated at the Time of Closing (a \"Non-Assignable Lease\"), then the Non-Assignable Lease shall not be assigned and the Purchaser shall, in accordance with the terms of a management agreement to be entered into by the parties at Closing, manage the Business as it is carried on at the location covered by the Non-Assignable Lease for the account of the Vendor provided that such agreement does not result in a violation of any Applicable [YOUR COUNTRY LAW] or result in the early termination of the Non-Assignable Lease. 7 7.2 Delivery of Space and Facilities Agreement 7 7.3 Release of Vendor from Lease Covenants 7 7.4 No Hiring of Employees 7 7.5 Access for Taxes 7 7.6 Volume Rebates 7 7.7 Remediation of Certain Outstanding Phase I Violations 7 8. GENERAL 7 8.1 Further Assurances 7 8.2 Time of the Essence 7 8.3 Expenses 7 8.4 Benefit of the Agreement 7 8.5 Entire Agreement 7 8.6 Amendments and Waiver 7 8.7 Assignment 7 8.8 Notices 7 8.9 Confidentiality 7 8.10 Governing [YOUR COUNTRY LAW] 7 8.11 Attornment 7 8.12 Counterparts 7 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement (the \"Agreement\") is effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Purchaser\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Vendor\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS the Vendor, through its [COMPANY NAME], is in the [SPECIFY] business; AND WHEREAS the Vendor desires to sell and the Purchaser desires to purchase as a going concern the undertaking and substantially all of the assets relating to the business of the Vendor's [COMPANY NAME], upon and subject to the terms and conditions hereinafter set forth; NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the covenants and agreements herein contained the parties hereto agree as follows: INTERPRETATION Definitions In this Agreement, unless something in the subject matter or context is inconsistent therewith:","Asset Purchase Agreement For a Retail Business","71",671,"https://templates.business-in-a-box.com/imgs/1000px/asset-purchase-agreement_for-a-retail-business-D931.png","https://templates.business-in-a-box.com/imgs/250px/931.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#931.xml",{"title":6,"description":6},[130,131],{"label":33,"url":98},{"label":100,"url":101},"asset purchase agreement for a retail business","/template/asset-purchase-agreement-for-a-retail-business-D931",{"description":135,"descriptionCustom":6,"label":136,"pages":137,"size":108,"extension":10,"preview":138,"thumb":139,"svgFrame":140,"seoMetadata":141,"parents":143,"keywords":142,"url":148},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","3","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":142,"description":6},"non disclosure agreement nda",[144,145],{"label":33,"url":98},{"label":146,"url":147},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":150,"descriptionCustom":6,"label":151,"pages":137,"size":108,"extension":10,"preview":152,"thumb":153,"svgFrame":154,"seoMetadata":155,"parents":157,"keywords":160,"url":161},"[DATE] [CONTACT NAME] [ADDRESS] [ADDRESS 2] [CITY, STATE/PROVINCE] [ZIP/POSTAL CODE] SUBJECT: LETTER OF INTENT-ACQUISITION OF BUSINESS Dear [CONTACT NAME]: This letter (\"Letter of Intent\") sets forth the basic preliminary terms between the Buyer or his nominee and yourselves regarding the purchase of the [SPECIFY] business (the \"Business\") carried on by yourselves. Except as specifically set forth herein, this Letter of Intent shall not constitute an agreement between the parties and no agreement shall be deemed to exist until execution of a definitive purchase agreement. It is proposed that Buyer will acquire certain assets of the Business which Buyer believes to be necessary to the future of the Business, including the warehouse in [CITY/STATE] in which [COMPANY NAME] the Company has invested [AMOUNT] in cash and which has been financed by a mortgage loan of approximately [AMOUNT] granted by the [SPECIFY COMPANY] [CITY/STATE]. Buyer understands that the said warehouse has no other charges or liabilities affecting it other than the said mortgage loan. Buyer may either purchase the warehouse outright or enter into a lease-purchase or instalment transfer of ownership which is satisfactory to both parties. The gross purchase price for the said warehouse will be [AMOUNT]. Buyer may purchase or lease barrels and other equipment currently owned by the Company which are necessary to operate the Business, on a cash or instalment basis agreeable to both parties. The specific assets to be purchased and the amounts to be paid by Buyer in connection with this transaction remain to be negotiated by the parties. This Letter of Intent also evidences the intentions of the parties with respect to the following agreements: Buyer will enter into a [NUMBER]-year employment agreement with [COMPANY NAME], providing for the Company will be responsible for the purchase of [SPECIFY] for Buyer. The agreement will contain the customary terms and conditions found in employment agreements in similar transactions and will provide for the usual non-competition and non-solicitation covenants to be entered into by the Company in favour of Buyer. It is expressly understood that if the contemplated transaction is consummated, the aggregate amount of commission paid or payable to yourselves (net of reasonable expenses acceptable to Buyer) in respect of all purchases of [SPECIFY] made through you from the date of this Letter of Intent to the date of closing, with the exception of commissions earned on the [NUMBER] truckloads of [SPECIFY] to be delivered to Buyer during the week of [DATE] to [DATE], will be applied against remuneration payable to the Company in the first year of his employment agreement. If the contemplated transaction is not consummated, all such commissions paid or payable will be treated as commissions. Buyer will enter into a [NUMBER]-year employment agreement with [EMPLOYEE NAME], providing for the payment of a gross base salary of [ANNUAL SALARY] per year, to be paid weekly, subject to annual review. [EMPLOYEE NAME] will be President of the Business and the employment agreement will provide for health benefits, automobile, expenses and bonus arrangements","Letter of Intent_Acquisition of Business","https://templates.business-in-a-box.com/imgs/1000px/letter-of-intent_acquisition-of-business-D5197.png","https://templates.business-in-a-box.com/imgs/250px/5197.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#5197.xml",{"title":156,"description":6},"letter of intent_acquisition of business",[158,159],{"label":33,"url":98},{"label":33,"url":98},"letter intent_acquisition business","/template/letter-of-intent_acquisition-of-business-D5197",{"description":163,"descriptionCustom":6,"label":164,"pages":137,"size":165,"extension":10,"preview":166,"thumb":167,"svgFrame":168,"seoMetadata":169,"parents":170,"keywords":179,"url":180},"PROMISSORY NOTE This Promissory Note (the \"Note\") is made and effective the [DATE], BETWEEN: [LENDER NAME] (the \"Lender\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Borrower\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] TERMS FOR VALUE RECEIVED, the Borrower promises to pay to the order of Lender, at its principal office located at [ADDRESS], or at such other place that is designated in writing by the holder hereof, the principal sum of [AMOUNT], together with all charges and interest herein provided, payable at the rate and in the manner hereinafter set forth: Borrower shall make monthly payments of principal and interest at the rate of [%] per annum based upon an amortization of [NUMBER] months. Monthly payments shall be due on or before the first day of each month with the first payment being due on or before [DATE]. If not sooner paid, all amounts due under this Note, including principal, interest and other charges shall be due and payable in full on or before the first day of [MONTH], [YEAR] (the \"Maturity Date\"). Time is of the essence of the payment obligations hereunder and each monthly payment shall be due and payable on or before the first day of each month. This Note is and will be secured by a certain first priority security interest in all of the tangible and intangible property of the Borrower, to be recorded in all applicable governmental offices. The parties shall execute a separate security agreement, in form and substance acceptable to the Lender in all respects. Borrower agrees to execute any such security agreements presented by the Lender or other documents required by the Lender in order to perfect its security interest in the above described property. Said Security Agreement and any other instruments and documents executed in connection with or given as security for this Note shall hereinafter be referred to collectively as the \"Loan Documents.\" All of the terms, covenants, Conditions, representations and warranties contained in the Loan Documents are hereby made part of this Note to the same extent and with the same force and effect as if fully set forth herein. If all or any portion of any payment due hereunder is not received by the Lender within [NUMBER] calendar days after the date when such payment is due, Borrower shall pay a late charge equal to [%] of such payment, such late charge to be immediately due and payable without demand by Lender. Borrower shall have the right to prepay all (but not a portion) of the indebtedness evidenced by this Note at any time, by paying the Lender an amount equal to the sum of (I) the principal balance then outstanding, (ii) all interest accrued to the date of such prepayment, (iii) all interest calculated through the Maturity Date, and (iv) any late charge or charges then due and owing. If any payment under this Note is not paid in full by the [DAY] of any month during the term hereof or if the entire amount due as represented by this Note is not paid in full on or before the Maturity Date, or should default be made in the performance or observation of any of the terms, covenants, or conditions contained in the Loan Documents, or if any representation or warranty contained in the Loan Documents is breached or is or becomes untrue, this Note shall be in default, and the entire principal amount outstanding hereunder, accrued interest thereon, all late charges, if any, and any and all other charges due hereunder, shall, at Lender's option, immediately become due and payable, without further notice, the giving of such notice being expressly waived by the Borrower","Promissory Note",39,"https://templates.business-in-a-box.com/imgs/1000px/promissory-note-D434.png","https://templates.business-in-a-box.com/imgs/250px/434.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#434.xml",{"title":6,"description":6},[171,173,176],{"label":17,"url":172},"finance-accounting",{"label":174,"url":175},"Business Loans","business-loan",{"label":177,"url":178},"Promissory Notes","promisory-note","promissory note","/template/promissory-note-D434",false,{"seo":183,"reviewer":193,"legal_disclaimer":197,"quick_facts":198,"at_a_glance":200,"personas":204,"variants":229,"glossary":254,"clauses":288,"how_to_fill":338,"common_mistakes":379,"faqs":404,"industries":435,"comparisons":452,"diy_vs_lawyer":467,"jurisdictions":480,"related_template_ids_curated":501,"schema":511,"classification":512},{"meta_title":184,"meta_description":185,"primary_keyword":22,"secondary_keywords":186},"Share Purchase Agreement Deemed Dividend Template (Free Word)","Free share purchase agreement deemed dividend template covering purchase price, deemed dividend treatment, tax elections, representations, and closing. Free Word and PDF download.",[187,188,189,190,191,192],"deemed dividend share purchase","stock purchase agreement deemed dividend","share purchase agreement word template","deemed dividend tax election agreement","share buyback deemed dividend agreement","corporate share repurchase agreement template",{"name":194,"credential":195,"reviewed_date":196},"Bruno Goulet","CEO, Business in a Box","2026-05-02",true,{"difficulty":199,"legal_review_recommended":197,"signature_required":197,"notarization_required":181},"advanced",{"what_it_is":201,"when_you_need_it":202,"whats_inside":203},"A Share Purchase Agreement Deemed Dividend is a legally binding contract governing the acquisition or redemption of shares in a corporation where the purchase price paid to the selling shareholder exceeds the paid-up capital of those shares, triggering a deemed dividend under applicable tax law. This free Word download provides a structured, attorney-ready starting point covering purchase price mechanics, deemed dividend calculation, tax withholding obligations, representations and warranties, and closing conditions — ready to edit online and export as PDF.\n","Use it when a corporation is repurchasing, redeeming, or cancelling its own shares at a price above their paid-up capital, creating a deemed dividend to the selling shareholder rather than a straight capital gain. It is also appropriate when structuring a purchase of shares between non-arm's-length parties where tax authorities may re-characterize the excess consideration as a dividend distribution.\n","Identification of parties and shares, purchase price and deemed dividend calculation, tax elections and withholding obligations, representations and warranties from both parties, closing mechanics and conditions, indemnification for tax liabilities, and governing law.\n",[205,209,213,217,221,225],{"title":206,"use_case":207,"icon_asset_id":208},"Private company shareholders","Selling shares back to the corporation at a premium above paid-up capital","persona-shareholder",{"title":210,"use_case":211,"icon_asset_id":212},"Corporate counsel and lawyers","Documenting share redemptions with deemed dividend characterization for compliance","persona-corporate-lawyer",{"title":214,"use_case":215,"icon_asset_id":216},"CFOs and finance directors","Structuring a share buyback program that triggers a dividend for tax efficiency","persona-cfo",{"title":218,"use_case":219,"icon_asset_id":220},"Tax advisors and CPAs","Supporting clients through a share repurchase where excess proceeds are taxed as a dividend","persona-tax-advisor",{"title":222,"use_case":223,"icon_asset_id":224},"Business owners exiting a closely-held corporation","Redeeming minority or majority shares as part of a succession or exit plan","persona-business-owner",{"title":226,"use_case":227,"icon_asset_id":228},"M&A transaction teams","Incorporating deemed dividend mechanics into a broader share acquisition structure","persona-ma-advisor",[230,233,236,239,242,246,250],{"situation":231,"recommended_template":7,"slug":232},"Corporation repurchasing its own shares from a departing shareholder","share-purchase-agreement-deemed-dividend-D342",{"situation":234,"recommended_template":235,"slug":232},"Straight arm's-length sale of shares between two private parties with no deemed dividend","Share Purchase Agreement",{"situation":237,"recommended_template":89,"slug":238},"Purchase of an entire business including assets and goodwill","asset-purchase-agreement-D928",{"situation":240,"recommended_template":106,"slug":241},"Transfer of shares among existing shareholders under a pre-agreed valuation","shareholders-agreement-D1016",{"situation":243,"recommended_template":244,"slug":245},"Redemption of preferred shares at a fixed redemption price","Preferred Share Redemption Agreement","agreement-for-redemption-of-preferred-shares-D316",{"situation":247,"recommended_template":248,"slug":249},"Share buyback executed on the open market by a public company","Share Repurchase Plan (Public Company)","public-relations-plan-D13755",{"situation":251,"recommended_template":252,"slug":253},"Freeze transaction where shares are exchanged for fixed-value preferred shares","Estate Freeze Share Exchange Agreement","exchange-of-shares-agreement-D330",[255,258,261,264,267,270,273,276,279,282,285],{"term":256,"definition":257},"Deemed Dividend","An amount treated as a dividend for tax purposes even though it is paid as part of a share purchase or redemption price, typically arising when proceeds exceed the shares' paid-up capital.",{"term":259,"definition":260},"Paid-Up Capital (PUC)","The amount recorded in a corporation's stated capital account for a class of shares, representing the original capital contribution — distinct from fair market value or redemption price.",{"term":262,"definition":263},"Redemption Price","The amount a corporation agrees to pay a shareholder to repurchase or cancel their shares, which may be set by the corporation's articles, a shareholder agreement, or negotiation.",{"term":265,"definition":266},"Capital Gain","The profit realized on the disposition of a capital property; in a share redemption, only the proceeds in excess of the adjusted cost base and not classified as a deemed dividend qualify as a capital gain.",{"term":268,"definition":269},"Adjusted Cost Base (ACB)","The cost of a shareholder's shares for tax purposes, including the original purchase price plus any adjustments prescribed by the applicable tax code.",{"term":271,"definition":272},"Withholding Tax","Tax deducted at source by the paying corporation on a dividend or deemed dividend paid to a non-resident shareholder, remitted directly to the tax authority.",{"term":274,"definition":275},"Non-Arm's-Length Transaction","A transaction between related parties — such as a shareholder and a corporation they control — where tax authorities may scrutinize the pricing and re-characterize proceeds.",{"term":277,"definition":278},"Tax Election","A formal filing made jointly or unilaterally by a seller and buyer (or corporation) to select specific tax treatment for a transaction, such as electing to treat proceeds as a dividend rather than a capital gain.",{"term":280,"definition":281},"Representations and Warranties","Factual statements made by each party in a contract that are true as of the signing date and closing date, creating indemnification liability if false.",{"term":283,"definition":284},"Closing Conditions","Specific events or confirmations that must occur before the share transfer and payment are completed, such as board approval, tax clearance, or regulatory consent.",{"term":286,"definition":287},"Indemnification","A contractual obligation by one party to compensate the other for specified losses — in this context, commonly covering tax reassessments or undisclosed liabilities arising from the deemed dividend.",[289,294,299,304,309,314,319,324,329,333],{"name":290,"plain_english":291,"sample_language":292,"common_mistake":293},"Parties, Recitals, and Share Description","Identifies the corporation and the selling shareholder as legal entities, describes the class and number of shares being purchased, and explains the background and purpose of the transaction.","This Share Purchase Agreement is entered into as of [DATE] between [CORPORATION LEGAL NAME], a corporation incorporated under the laws of [JURISDICTION] ('Corporation'), and [SHAREHOLDER FULL NAME / ENTITY NAME] ('Seller'). The Corporation agrees to purchase from Seller [NUMBER] [CLASS] shares (the 'Purchased Shares') of the Corporation's share capital.","Describing shares by certificate number alone without confirming the class and series. If the corporation has multiple share classes, an ambiguous description can invalidate the redemption or create disputes about which shares were sold.",{"name":295,"plain_english":296,"sample_language":297,"common_mistake":298},"Purchase Price and Payment Mechanics","States the total price the corporation will pay per share and in aggregate, specifies the payment method and timing, and identifies whether the price is above, at, or below fair market value.","The aggregate purchase price for the Purchased Shares shall be $[AMOUNT] (the 'Purchase Price'), representing $[AMOUNT] per share. Payment shall be made by [wire transfer / certified cheque / promissory note] on the Closing Date to the account or address specified in Schedule A.","Setting the purchase price without documenting the valuation basis. Tax authorities routinely challenge non-arm's-length share prices; attaching a current independent valuation or referencing an agreed formula reduces reassessment risk.",{"name":300,"plain_english":301,"sample_language":302,"common_mistake":303},"Deemed Dividend Calculation and Acknowledgment","Calculates the deemed dividend amount — the excess of the purchase price over the paid-up capital of the shares — and confirms both parties' acknowledgment of the tax characterization.","The parties acknowledge that the Deemed Dividend Amount is calculated as follows: Purchase Price ($[AMOUNT]) less Paid-Up Capital of the Purchased Shares ($[AMOUNT]) equals Deemed Dividend ($[AMOUNT]). Seller acknowledges that the Deemed Dividend Amount will be included in Seller's income as a taxable dividend for the taxation year in which Closing occurs.","Omitting the deemed dividend calculation entirely and treating the full redemption price as a capital gain. This is the most common source of costly tax reassessments in private corporation share repurchases.",{"name":305,"plain_english":306,"sample_language":307,"common_mistake":308},"Tax Withholding and Remittance","Allocates responsibility for calculating, withholding, and remitting applicable taxes on the deemed dividend — critical for non-resident shareholders subject to withholding tax.","The Corporation shall withhold from the Purchase Price and remit to [TAX AUTHORITY] withholding tax equal to [X]% of the Deemed Dividend Amount, as required under [APPLICABLE TAX LEGISLATION]. The net amount payable to Seller after withholding shall be $[NET AMOUNT].","Paying the full purchase price to the selling shareholder without withholding and remitting applicable dividend withholding tax, leaving the corporation exposed to penalties and interest from the tax authority.",{"name":310,"plain_english":311,"sample_language":312,"common_mistake":313},"Tax Elections","Documents any joint or unilateral elections the parties are making in connection with the transaction, including elections to treat proceeds as a dividend, capital dividend account elections, or other prescribed filings.","The parties agree to jointly execute and file [ELECTION FORM / DESIGNATION] with [TAX AUTHORITY] within [NUMBER] days of the Closing Date, electing [SPECIFIC TREATMENT] in respect of the Deemed Dividend Amount. Each party shall bear its own costs of filing.","Missing the filing deadline for a joint tax election. In Canada, for example, a late-filed section 83(2) capital dividend election triggers penalty tax on the entire dividend amount.",{"name":315,"plain_english":316,"sample_language":317,"common_mistake":318},"Representations and Warranties of the Seller","The selling shareholder confirms they legally own the shares free of encumbrances, have authority to sell, and are aware of the tax treatment — and that no third-party consent is required to complete the transfer.","Seller represents and warrants that: (a) Seller is the registered and beneficial owner of the Purchased Shares, free and clear of all liens, claims, and encumbrances; (b) Seller has full power and authority to sell the Purchased Shares; and (c) no consent, approval, or authorization of any third party is required to complete the transactions contemplated herein.","Omitting a representation that the shares are free of security interests or liens. A pledged share transferred without lender consent can expose the buyer corporation to a priority claim from the secured creditor.",{"name":320,"plain_english":321,"sample_language":322,"common_mistake":323},"Representations and Warranties of the Corporation","The corporation confirms it has legal authority to repurchase the shares, that the repurchase complies with its articles and applicable corporate law (solvency tests), and that no shareholders' agreement restricts the transaction.","The Corporation represents and warrants that: (a) the repurchase of the Purchased Shares has been duly authorized by the Corporation's board of directors; (b) following the repurchase, the Corporation will not be insolvent and will be able to pay its liabilities as they come due; and (c) the repurchase does not violate any shareholders' agreement, unanimous shareholders' agreement, or restriction in the Corporation's articles.","Failing to confirm the solvency test required by corporate statute. Most jurisdictions prohibit a corporation from repurchasing its shares if doing so would render it unable to pay its debts — proceeding without this confirmation exposes directors to personal liability.",{"name":325,"plain_english":326,"sample_language":327,"common_mistake":328},"Conditions to Closing","Lists the specific steps that must be completed before the share transfer is finalized — typically board resolutions, delivery of share certificates, regulatory approvals, and confirmation of no material adverse change.","The obligation of the Corporation to purchase the Purchased Shares is conditional upon: (a) delivery by Seller of the share certificate(s) representing the Purchased Shares duly endorsed for transfer; (b) passage of a board resolution approving the purchase; and (c) receipt of any required consents from [REGULATORY AUTHORITY / LENDER].","Not requiring cancellation of the share certificate as a closing deliverable. If the certificates are not cancelled and recorded in the share register, the sold shares can be treated as still outstanding for corporate and tax purposes.",{"name":286,"plain_english":330,"sample_language":331,"common_mistake":332},"Sets out each party's obligation to compensate the other for losses arising from breaches of representations and warranties or from tax reassessments attributable to the deemed dividend mechanics.","Each party (the 'Indemnifying Party') agrees to indemnify and hold harmless the other party from any losses, damages, penalties, or interest arising from: (a) any breach of such party's representations and warranties; or (b) any tax reassessment by [TAX AUTHORITY] resulting from the Deemed Dividend Amount being re-characterized or the withholding tax being found insufficient.","Including indemnification for tax reassessments without a time limit or cap. Open-ended indemnities expose the indemnifying party to unlimited liability years after closing — tie them to the relevant statutory limitation period.",{"name":334,"plain_english":335,"sample_language":336,"common_mistake":337},"Governing Law and Entire Agreement","Specifies the jurisdiction whose laws govern the agreement, where disputes will be resolved, and confirms that this document supersedes all prior discussions and agreements relating to the share purchase.","This Agreement is governed by the laws of [PROVINCE / STATE / COUNTRY] and the parties submit to the exclusive jurisdiction of the courts of [JURISDICTION]. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, and understandings.","Selecting a governing law that differs from both the corporation's jurisdiction of incorporation and the seller's residence, creating uncertainty about which tax legislation and corporate statute actually governs the transaction.",[339,344,349,354,359,364,369,374],{"step":340,"title":341,"description":342,"tip":343},1,"Identify all parties with full legal names","Enter the corporation's exact registered name, jurisdiction of incorporation, and registered address. Enter the selling shareholder's full legal name — or entity name and jurisdiction if the seller is a corporation or trust.","Cross-reference the corporation's current share register and articles to confirm the exact class name and number of shares being repurchased before filling in any share description.",{"step":345,"title":346,"description":347,"tip":348},2,"Confirm the paid-up capital of the shares","Obtain the corporation's stated capital account balance for the relevant share class from the corporate minute book or audited financial statements. This figure is the baseline for calculating the deemed dividend.","Paid-up capital per share is rarely the same as the original subscription price — stock dividends, reorganizations, and adjustments can alter it. Confirm the current figure with the corporation's accountant before drafting.",{"step":350,"title":351,"description":352,"tip":353},3,"Calculate and document the deemed dividend amount","Subtract the paid-up capital attributable to the purchased shares from the agreed purchase price. Insert both figures and the resulting deemed dividend amount into the deemed dividend clause, and confirm both parties have reviewed and acknowledged the calculation.","Round-number estimates are a red flag in tax audits. Use the precise figures from the corporate records, not approximations.",{"step":355,"title":356,"description":357,"tip":358},4,"Determine and insert the applicable withholding rate","Establish whether the selling shareholder is a resident or non-resident of the taxing jurisdiction. For non-residents, apply the treaty withholding rate (commonly 15–25% depending on the applicable tax treaty) and insert the net payment amount in the withholding clause.","For Canadian private corporations, the gross-up and dividend tax credit rules apply to resident individuals — confirm with a tax advisor whether a capital dividend account election can shelter any portion of the deemed dividend.",{"step":360,"title":361,"description":362,"tip":363},5,"Complete the representations and warranties for both parties","Work through each representation methodically. Confirm share ownership via the share register, verify board authorization in the minute book, and ensure the solvency test has been met by reviewing recent financial statements.","Have the corporate secretary confirm in writing that the share certificate numbers match the register before execution — certificate discrepancies are a common closing-day delay.",{"step":365,"title":366,"description":367,"tip":368},6,"List all closing conditions and deliverables","Itemize every document and action required at closing: board resolution, share certificates endorsed for transfer, wire transfer confirmation, and any third-party consents. Attach a closing checklist as a schedule.","Set a firm closing date with a cut-off time, not just 'on or before' language. Vague closing mechanics create disputes when one party delays.",{"step":370,"title":371,"description":372,"tip":373},7,"Attach and cross-reference all schedules","Complete Schedule A (payment instructions), Schedule B (share description and certificate numbers), and any tax election forms. Ensure every schedule referenced in the body is attached and initialled by both parties.","Number schedules sequentially and confirm the body of the agreement references each schedule by its correct letter or number — mismatched references invalidate schedules in some jurisdictions.",{"step":375,"title":376,"description":377,"tip":378},8,"Execute before closing and update the share register","Both parties must sign the agreement before the purchase price is paid. Immediately after closing, update the corporation's share register to reflect the cancellation of the purchased shares.","File the share cancellation in the corporate minute book the same day as closing — delayed register updates have caused tax reassessment disputes when the tax year turns before the records are corrected.",[380,384,388,392,396,400],{"mistake":381,"why_it_matters":382,"fix":383},"Treating the entire redemption price as a capital gain","When a corporation repurchases its own shares at a price above paid-up capital, the excess is a deemed dividend by law — not a capital gain. Mischaracterizing it triggers reassessments, penalties, and interest that can exceed the original tax savings.","Always calculate the paid-up capital per share from the corporate records and document the deemed dividend amount explicitly in the agreement before closing.",{"mistake":385,"why_it_matters":386,"fix":387},"Failing to withhold tax on a deemed dividend paid to a non-resident","The paying corporation — not the selling shareholder — is liable for unremitted withholding tax on dividends paid to non-residents. Regulators can assess the full withholding amount plus interest against the corporation even after the funds have left the country.","Identify the seller's residency status before drafting, apply the correct treaty rate, and remit withheld amounts to the tax authority on or before the prescribed due date.",{"mistake":389,"why_it_matters":390,"fix":391},"Missing a joint tax election filing deadline","In Canada, a late capital dividend account election under subsection 83(2) converts the entire dividend into a taxable dividend and triggers penalty tax — eliminating the tax-free treatment the election was designed to achieve.","Include a specific filing deadline in the agreement and assign one party responsibility for initiating the joint filing. Set a calendar reminder for at least 30 days before the statutory deadline.",{"mistake":393,"why_it_matters":394,"fix":395},"No independent valuation supporting the purchase price","In non-arm's-length transactions, tax authorities can substitute fair market value for the stated purchase price if the parties cannot demonstrate how the price was determined. A reassessment of the purchase price changes both the deemed dividend amount and any capital gain calculation.","Commission or document a current business valuation or use a pre-agreed formula in the shareholders' agreement, and attach the supporting calculation as a schedule to the agreement.",{"mistake":397,"why_it_matters":398,"fix":399},"Omitting the solvency representation by the corporation","Most corporate statutes prohibit a corporation from repurchasing shares if doing so would render it insolvent. Directors who approve a repurchase in breach of the solvency test face personal liability for resulting creditor losses.","Include an express representation that the corporation passes the applicable solvency test as of the closing date, and have management confirm this in writing in the board resolution authorizing the repurchase.",{"mistake":401,"why_it_matters":402,"fix":403},"Not cancelling share certificates and updating the share register at closing","Uncancelled certificates leave the shares in a legally ambiguous state — they may be treated as outstanding for quorum, voting, or further transfer purposes, and the tax filing position can be challenged if the register does not match the transaction date.","Make certificate delivery and cancellation an express closing condition, and update the corporate share register the same day the purchase price is paid.",[405,408,411,414,417,420,423,426,429,432],{"question":406,"answer":407},"What is a share purchase agreement deemed dividend?","A share purchase agreement deemed dividend is a contract under which a corporation repurchases or redeems its own shares from a shareholder at a price that exceeds the shares' paid-up capital, causing the excess amount to be treated as a dividend for tax purposes rather than a capital gain. The agreement documents the purchase price, the deemed dividend calculation, applicable tax withholding, and the closing mechanics in a single binding document. It is most commonly used in private corporation share redemptions, succession planning, and shareholder exit transactions.\n",{"question":409,"answer":410},"How is the deemed dividend amount calculated?","The deemed dividend equals the purchase price paid to the shareholder minus the paid-up capital of the shares being repurchased. For example, if a corporation pays $500,000 to buy back shares with a paid-up capital of $100,000, the deemed dividend is $400,000. The remaining $400,000 is taxed as a dividend in the seller's hands, not as a capital gain. The adjusted cost base of the shares still determines whether there is any remaining capital gain or loss on the disposition.\n",{"question":412,"answer":413},"Why is a share redemption treated as a deemed dividend rather than a capital gain?","Most tax codes treat the excess proceeds of a share redemption as a dividend because the corporation is distributing accumulated earnings to its shareholders — economically the same as paying a dividend. Taxing it as a capital gain instead would allow shareholders to access retained earnings at the lower capital gains rate, which most tax systems treat as preferential treatment reserved for genuine property dispositions, not corporate earnings distributions.\n",{"question":415,"answer":416},"What taxes apply to a deemed dividend?","For resident individual shareholders, the deemed dividend is grossed up and taxed at dividend rates, which are often lower than ordinary income rates due to dividend tax credits or preferential rates in many jurisdictions. For non-resident shareholders, the paying corporation must withhold tax — typically 15–25% depending on the applicable tax treaty — and remit it to the tax authority. Corporate shareholders may benefit from an inter-corporate dividend deduction, potentially reducing tax to near zero depending on the jurisdiction and the relationship between the companies.\n",{"question":418,"answer":419},"Does the seller also have a capital gain when shares are redeemed?","Potentially yes. After stripping out the deemed dividend amount, the seller's proceeds of disposition for capital gains purposes are reduced to the paid-up capital of the shares. If that reduced figure exceeds the seller's adjusted cost base, there is still a capital gain. If the adjusted cost base exceeds the reduced proceeds, the seller may realize an allowable capital loss. The interaction between deemed dividend and capital gain treatment makes this a complex area requiring careful calculation for each transaction.\n",{"question":421,"answer":422},"Is a share purchase agreement deemed dividend different from a regular share purchase agreement?","Yes. A standard share purchase agreement covers the sale of shares from one shareholder to another third party at fair market value, where the proceeds are typically treated as capital gains. A deemed dividend agreement is specifically structured for a corporation repurchasing its own shares at a price above paid-up capital, adding clauses covering the deemed dividend calculation, tax withholding obligations, and any associated tax elections that do not appear in an arm's-length share sale.\n",{"question":424,"answer":425},"Do I need a lawyer to prepare a share purchase agreement with a deemed dividend?","Given the tax complexity and the indemnification exposure involved, legal and accounting review is strongly recommended. A tax advisor should confirm the paid-up capital figure, review the withholding tax obligation, and advise on any elections available to reduce the tax cost. A lawyer should review the representations and warranties, closing conditions, and indemnification provisions. Using this template as a starting point typically reduces professional fees by providing a structured first draft that advisors can review and annotate rather than draft from scratch.\n",{"question":427,"answer":428},"What happens if the corporation pays more than fair market value for the shares?","If the purchase price exceeds the fair market value of the shares, tax authorities in most jurisdictions can recharacterize the excess as an additional benefit conferred on the shareholder — potentially triggering shareholder benefit rules in addition to the deemed dividend, and exposing both parties to reassessment. In non-arm's-length transactions, the purchase price should be supported by an independent valuation or a formula in the shareholders' agreement to demonstrate that fair market value was respected.\n",{"question":430,"answer":431},"What corporate approvals are required before a corporation can repurchase its shares?","Typically, the corporation's board of directors must pass a resolution authorizing the repurchase, confirming that the transaction complies with the solvency tests in the applicable corporate statute. Depending on the jurisdiction and the corporation's articles or shareholders' agreement, shareholder approval may also be required. The agreement should make these approvals express conditions to closing, and certified copies of the board resolution should be delivered at closing as a closing deliverable.\n",{"question":433,"answer":434},"Can a capital dividend account election reduce the tax on a deemed dividend in Canada?","Yes, in certain circumstances. If the corporation has a positive capital dividend account balance — built up from tax-free capital gains, life insurance proceeds, or other eligible amounts — it can elect to pay all or part of the deemed dividend as a capital dividend, which is received tax-free by the shareholder. This election must be filed jointly with the tax authority on a prescribed form before or concurrently with the dividend payment; a late election triggers penalty tax and eliminates the benefit. Including a tax election clause and a strict filing deadline in the agreement protects both parties.\n",[436,440,444,448],{"industry":437,"icon_asset_id":438,"specifics":439},"Private Equity and Venture Capital","industry-private-equity","Investor share redemptions upon exit or restructuring frequently trigger deemed dividends when carried-interest or premium pricing exceeds low paid-up capital on preferred shares issued at incorporation.",{"industry":441,"icon_asset_id":442,"specifics":443},"Professional Services","industry-professional-services","Accounting, legal, and consulting firm partners commonly redeem shares upon retirement, with the deemed dividend calculation tied to retained earnings accumulated over long partnerships.",{"industry":445,"icon_asset_id":446,"specifics":447},"Family Business and Succession Planning","industry-family-business","Generational share transfers in family-owned corporations regularly use share redemptions above paid-up capital, with estate freeze and pipeline planning strategies interacting closely with deemed dividend rules.",{"industry":449,"icon_asset_id":450,"specifics":451},"Technology / SaaS","industry-saas","Founder share buybacks following a partial liquidity event or cap table clean-up often involve shares with nominal paid-up capital, resulting in large deemed dividends that require careful withholding and treaty analysis for non-resident founders.",[453,457,460,463],{"vs":454,"vs_template_id":455,"summary":456},"Share Purchase Agreement (Standard)","share-purchase-agreement-D327","A standard share purchase agreement governs the sale of shares from one shareholder to another unrelated buyer, with proceeds typically treated as capital gains. A deemed dividend agreement is used when the corporation itself is the buyer and the price exceeds paid-up capital, triggering dividend tax treatment on the excess. The tax analysis, withholding obligations, and elections required are fundamentally different between the two structures.",{"vs":89,"vs_template_id":458,"summary":459},"asset-purchase-agreement-D316","An asset purchase agreement transfers specific business assets — equipment, IP, contracts, goodwill — rather than the shares of the corporation. There is no deemed dividend in an asset purchase; instead, the seller may realize ordinary income or capital gains depending on the asset class. Buyers generally prefer asset purchases for liability protection; sellers often prefer share sales for capital gains treatment, making the choice between the two a central deal negotiation point.",{"vs":106,"vs_template_id":461,"summary":462},"shareholders-agreement-D340","A shareholders agreement governs the ongoing relationship among shareholders — voting rights, transfer restrictions, drag-along and tag-along provisions, and pre-emptive rights. It may include a share valuation formula and trigger events for mandatory buybacks, but it does not itself execute a redemption or document the deemed dividend. The share purchase agreement is the transactional document used to implement a buyback already contemplated by the shareholders agreement.",{"vs":464,"vs_template_id":465,"summary":466},"Business Purchase Agreement","business-purchase-agreement-D1443","A business purchase agreement governs the acquisition of an entire business — which may be structured as either a share purchase or an asset purchase — and typically involves due diligence schedules, material contract consents, and employment transition terms not present in a share redemption. A deemed dividend share purchase agreement is narrower in scope, focused on the tax mechanics of the corporation repurchasing its own shares from a specific shareholder rather than a full business acquisition.",{"use_template":468,"template_plus_review":472,"custom_drafted":476},{"best_for":469,"cost":470,"time":471},"Simple domestic share redemptions between a resident shareholder and a closely-held private corporation where a tax advisor has already confirmed the paid-up capital and deemed dividend amount","Free","1–2 hours to complete",{"best_for":473,"cost":474,"time":475},"Most private corporation share repurchases, including those involving non-resident shareholders, capital dividend account elections, or succession planning transactions","$500–$2,000 for combined legal and tax advisor review","3–7 business days",{"best_for":477,"cost":478,"time":479},"Complex transactions involving multiple share classes, earn-outs, cross-border withholding, estate freezes, or significant indemnification exposure above $500,000","$3,000–$10,000+","2–4 weeks",[481,486,491,496],{"code":482,"name":483,"flag_asset_id":484,"note":485},"us","United States","flag-us","Under the US Internal Revenue Code, a corporate redemption is treated as a dividend to the extent of the corporation's current and accumulated earnings and profits (E&P), with any excess treated as a return of capital or capital gain. The redemption may qualify for capital gain treatment under IRC Section 302 if it meets specific tests — complete termination of interest, substantially disproportionate redemption, or not essentially equivalent to a dividend. Non-resident alien shareholders are subject to a 30% withholding tax on dividend amounts, reducible by applicable tax treaty.",{"code":487,"name":488,"flag_asset_id":489,"note":490},"ca","Canada","flag-ca","The deemed dividend rules in Canada are found in subsection 84(3) of the Income Tax Act, which applies whenever a private corporation redeems shares at a price exceeding their paid-up capital. The deemed dividend reduces the seller's proceeds of disposition for capital gains purposes. If the corporation has a positive capital dividend account, it may elect under subsection 83(2) to pay all or part of the deemed dividend as a tax-free capital dividend — but the election must be filed before or concurrent with the payment. Non-resident shareholders are subject to Part XIII withholding tax, typically 25% or reduced by treaty.",{"code":492,"name":493,"flag_asset_id":494,"note":495},"uk","United Kingdom","flag-uk","In the UK, a company purchasing its own shares is generally treated as a distribution (dividend) to the extent the consideration exceeds the share's original issue price, under the Companies Act 2006 and Income Tax Act 2007 rules. However, qualifying unquoted trading companies may apply for capital gains treatment under HMRC's purchase of own shares rules, provided strict conditions are met — including a minimum five-year ownership period and genuine commercial purpose. Advance clearance from HMRC is strongly recommended before relying on capital gains treatment.",{"code":497,"name":498,"flag_asset_id":499,"note":500},"eu","European Union","flag-eu","There is no harmonized EU treatment for deemed dividends on share repurchases; rules vary significantly by member state. Germany taxes the excess redemption proceeds as a hidden distribution; France applies withholding tax on dividend distributions including redemption proceeds above nominal value; the Netherlands uses the participation exemption to shelter corporate shareholders in qualifying structures. Cross-border transactions within the EU may qualify for the Parent-Subsidiary Directive withholding tax exemption where the parent corporation holds at least 10% of the subsidiary's capital for a minimum 12-month period.",[232,238,241,502,503,504,505,506,507,508,509,510],"asset-purchase-agreement-for-a-retail-business-D931","non-disclosure-agreement-nda-D12692","letter-of-intent_acquisition-of-business-D5197","promissory-note-D434","certificate-of-corporate-resolution-D3","stock-transfer-agreement-D14069","checklist-customer-due-diligence-D13916","indemnification-agreement-D12703","term-sheet-D473",{"emit_how_to":197,"emit_defined_term":197},{"primary_folder":98,"secondary_folder":513,"document_type":514,"industry":515,"business_stage":516,"tags":517,"confidence":523},"equity-and-mergers","agreement","general","all-stages",[518,519,520,521,522],"equity","m-and-a","share-purchase-agreement","deemed-dividend","tax-withholding",0.95,"\u003Ch2>What is a Share Purchase Agreement Deemed Dividend?\u003C/h2>\n\u003Cp>A \u003Cstrong>Share Purchase Agreement Deemed Dividend\u003C/strong> is a legally binding contract that governs the repurchase or redemption of shares by a corporation from one of its shareholders at a price that exceeds the shares' paid-up capital, causing the excess consideration to be characterized as a dividend for tax purposes rather than a capital gain. The agreement documents the purchase price, calculates the deemed dividend amount, allocates responsibility for withholding and remitting applicable taxes, and sets out the representations, closing conditions, and indemnification obligations required to complete the transaction on a sound legal and tax footing. It is used primarily in closely-held private corporations undergoing shareholder exits, succession transactions, or capital restructurings where retaining capital gains treatment on the full redemption price is either legally unavailable or tax-inefficient.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Proceeding with a share redemption without a properly structured agreement exposes both the corporation and the selling shareholder to serious consequences. Without an explicit deemed dividend calculation and acknowledgment, the parties risk conflicting tax filings that attract reassessment — and the corporation, not the selling shareholder, is on the hook for any unremitted withholding tax on amounts paid to non-residents. Missing a tax election filing deadline can convert a tax-free capital dividend into a fully taxable one, eliminating the benefit the transaction was structured to achieve. Directors who approve a share repurchase without confirming the statutory solvency test face personal liability if the corporation cannot pay its creditors. This template provides the clause-by-clause structure — deemed dividend acknowledgment, withholding mechanics, solvency representation, and closing deliverables — that transforms a routine share buyback into a documented, defensible transaction ready for tax authority scrutiny.\u003C/p>\n",1781186012554]