The closing checklist carried the same line item as the last asset deal. On a share purchase there is no vendor and no purchaser of the debts for the section to apply to.
Short answer
No — section 22 only applies where a taxpayer has “sold all or substantially all the property used in carrying on the business, including the debts...to a purchaser,” and a share sale never meets that condition. The corporation itself disposes of nothing: its receivables stay on its own balance sheet throughout, held by the same legal person before and after closing.
The same threshold that opens s.22(1) is what closes it off on a share deal: “...sold all or substantially all the property used in carrying on the business, including the debts...to a purchaser who proposes to continue the business which the vendor has been carrying on...” A share purchase transfers ownership of the corporation’s shares, not its property — the corporation that owns the receivables before closing is the same corporation that owns them after, so there is no sale of the debts for the section to reach.
On a share deal, any collection-risk discount on the receivables is priced entirely into the working-capital adjustment on the share price instead — there is no election to file because there is no vendor and no purchaser of the debts for the section to apply to. A closing checklist built from a prior asset deal that carries the s.22 line item forward onto a share deal is applying the wrong template, not missing a step.
See it decided in the share-deal-has-no-s.22-election case file, the asset-deal section-22-election file and the allowance-for-doubtful-accounts file.
A 30-minute call is enough to tell you whether your numbers hold up.
Canadian small-business transaction data is not published anywhere, so most valuations in this country quote an American benchmark. The Deavo–Treadstone Acquisition Index is a daily record of Canadian listings built to replace that: asking-price distributions by province and city are published now, and days on market, departure rates and asking-to-sale spreads follow as the series lengthens. Leave an email and we will tell you as each measure lands.
No pitch, no listings. One email when the first report lands.
