A closing checklist lists deliverables. A closing condition is narrower: a specific legal or regulatory fact that has to be true, on that day, before the buyer's funds release.
Key takeaways
A closing checklist and a set of closing conditions are related but different things — see working through the closing checklist for the fuller deliverables list. A condition is narrower and harder-edged: a specific fact that has to be objectively true before the buyer instructs its lawyer to release funds. Missing a checklist item usually just means more work. Failing a condition means the deal is not ready to close at all, whatever else is finished.
Where the target is disposing of “all or substantially all” of its property outside the ordinary course of business, CBCA s.189(3) requires shareholder approval by special resolution, and s.189(4)(b) requires the notice of that meeting to state the shareholders’ right to dissent. That right, set out in s.190, lets a dissenting shareholder demand fair value for their shares instead of being carried into the transaction — with its own clock: the corporation must give notice “within ten days” of the resolution, the dissenting shareholder demands payment “within twenty days” of that notice, and the corporation must offer payment “not later than seven days” after the later of the transaction taking effect and receiving the demand. A live dissent claim does not usually block the underlying transaction, but a deal team should confirm before closing whether the resolution actually passed by the required “not less than two-thirds” under s.2(1)’s definition of a special resolution, and whether any shareholder gave notice of dissent that the corporation now has to reserve against.
For a transaction that clears the Competition Act’s notification thresholds, s.123 sets a genuine closing condition: the transaction “shall not be completed before the end of” 30 days after the Commissioner receives complete information, or a further 30 days from compliance with any supplementary information request — a second clock that runs from responding to the request, not from receiving it. Section 123(2) allows the waiting period to be waived if the Commissioner notifies the parties there is no intention to challenge the deal. As noted in why add-ons price lower than the platform, most deals in this hub sit well under the $400 million party-size test in s.109(1), but where a transaction is notifiable, this waiting period is a hard closing condition, not a formality to be waived by agreement between the parties themselves.
Where the buyer is not Canadian, the Investment Canada Act adds a distinct condition on top of any Competition Act analysis. A direct acquisition of control is reviewable where the value of the assets acquired “is five million dollars or more” under s.14(3), or fifty million dollars or more for an indirect acquisition under s.14(4). For a WTO investor, s.14.1(1)(d) sets a materially higher enterprise-value threshold, published annually by the Minister in the Canada Gazette — the base figure in the Act is $1,000,000,000, adjusted each year thereafter, and the current-year figure should be confirmed directly rather than assumed from the statutory base. Where a transaction is reviewable, obtaining a net-benefit approval, or confirming the deal falls under a review exemption, is its own closing condition running on its own timeline — one a deal team should confirm applies, or does not, well before the transaction is scheduled to close.
The GST/HST election under ETA s.167 is “not available” — per its own drafting — where the seller is a registrant and the buyer is not, which makes the buyer’s own GST/HST registration a genuine closing condition, confirmed before the deal closes rather than assumed. Separately, where the seller is a non-resident of Canada, ITA s.116 makes a clearance certificate the condition that decides how much cash actually reaches the seller: without one, the buyer must withhold 25% of the purchase price (50% for certain property types) and remit it directly, rather than releasing the full amount. See cash and debt sweeps at completion for how that withholding changes the funds flow on the day itself.
A PPSA search against the target — see the mechanics of running one — confirms whether an existing secured lender’s registration needs to be discharged, assigned or postponed before a new lender will fund. Material contracts need their own assignment or change-of-control consents confirmed, since not every contract transfers automatically on an asset deal — see the share-versus-asset structuring guide for that distinction. And where the target operates under an existing unanimous shareholder agreement, CBCA s.146(4) gives an un-notified purchaser a real, statutory 30-day rescission right once it becomes aware of the agreement — which means confirming, before closing, whether a USA exists and was properly disclosed is itself a condition worth checking, not a governance detail that can wait until after funds move.
An Ontario asset purchase is scheduled to close in 45 days. The deal team’s condition checklist, confirmed in sequence: the buyer’s GST/HST registration is active, so the s.167 election can be filed; a PPSA search shows one registration against the target’s equipment, with a discharge undertaking obtained from the existing lender; the seller, a Canadian resident, means no s.116 withholding applies; and — since the transaction sits far under the Competition Act’s $400 million party-size threshold — no notification or waiting period applies at all. Funds are instructed to release only once all four are confirmed in writing, not on the calendar date alone.
No, not for a notifiable transaction -- s.123 makes the waiting period a hard condition, running 30 days from complete information (or from responding to a supplementary request), unless the Commissioner waives it under s.123(2).
The buyer must withhold and remit 25% of the purchase price (50% for certain property types under s.116(5.2)) rather than releasing the full sale proceeds -- the certificate, not the parties' agreement, decides how much cash actually moves.
The sourced material does not describe dissent as blocking the underlying transaction, but it creates a real, clocked payment obligation the corporation has to reserve against -- confirm before closing whether any shareholder gave notice of dissent under CBCA s.190.
Only above its own thresholds -- $5 million in asset value for a direct acquisition of control, $50 million for an indirect one, or the much higher WTO-investor enterprise-value threshold for a qualifying investor. Below those figures, an ICA review condition does not apply, though the acquisition may still need to be confirmed as falling outside them.
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