Most of what can go wrong on a business purchase gets caught during diligence, weeks before closing. What's left by closing day is a shorter, more specific list — and it is worth knowing before the day arrives, not while it is happening.
Key takeaways
One Ontario closing-mechanics guide treats this as a standing instruction, not a footnote: “Confirm wire instructions by telephone using a number obtained independently, not one taken from the email carrying the instructions.” The instruction exists because it works — a compromised email thread that redirects a six- or seven-figure closing payment to a fraudster's account is not a hypothetical, and it is functionally unrecoverable once the funds clear.
The same source lists what has to be in hand before the trust-conditioned exchange can actually happen: “landlord consents, bank payout statements and PPSA discharge authorisations, third-party consents under change-of-control clauses, licence transfers, clearance certificates, non-competition and employment agreements.” Any one of these missing on the day — a PPSA discharge that wasn't actually obtained, a landlord consent still sitting with a lawyer waiting for signature — stalls the entire closing, because the exchange is coordinated as a single event, not a sequence of independent steps.
A related due-diligence piece confirms why the discharge matters specifically: “a personal property security search shows registered security against the business's equipment, inventory and receivables” an unresolved one against equipment, inventory or receivables is exactly the kind of thing a buyer's own PPSA search should have already surfaced before closing day.
On an asset purchase, provincial sales tax adds a genuinely under-appreciated closing risk, and it works differently by province. In Saskatchewan, the Revenue Division's own bulletin on buying and selling a business states plainly that failing to obtain a clearance certificate from the seller “could result in the purchaser or seller being held liable for any outstanding taxes unpaid by the seller,” and the buyer “can be held liable under Section 51 of The Revenue and Financial Services Act for the seller's provincial tax debts” — all tax types, not just PST.
British Columbia runs the opposite collection rule — the seller normally collects and remits — but the buyer's exposure without a certificate is nearly identical: “If the purchaser does not obtain a clearance certificate, they are liable for an amount equal to any outstanding amount owed by the collector.” A share purchase sidesteps this entirely in both provinces, since neither treats a share sale as triggering the bulk-sale or collector rules that create the risk.
Manitoba's own statute, the Tax Administration and Miscellaneous Taxes Act, runs a third variant again — the seller applies for the certificate, and the buyer is liable for the seller's tax debt on assessment unless it obtains a copy. Three provinces, three different mechanics, one common thread: the certificate has to be chased down before closing, not treated as paperwork that can follow afterward.
Deal pricing routinely assumes the joint election under section 167 of the Excise Tax Act will apply, avoiding GST/HST on the sale entirely. The election is unavailable, by its own terms, “where the supplier is a registrant and the recipient is not a registrant,” If the buyer's registration was still pending, or lapsed, or never actually confirmed before closing, a tax cost the price assumed away can turn out to be real — discovered on, or just after, closing day.
The same escrow and holdback guidance cited above states the rule that catches an unprepared buyer: “where the seller is not resident in Canada and is disposing of taxable Canadian property, the buyer is personally liable to remit 25 per cent of the cost of the property to the Receiver General unless the seller produces a clearance certificate.” The buyer's exposure here doesn't depend on the seller's cooperation — it is the buyer's own statutory liability, tied to the section 116 clearance certificate specifically.
Covered in more detail in a companion piece on post-closing filings: a buyer who was never told about a unanimous shareholder agreement existing over the target's shares is deemed a party to it regardless, and if notice was never given, the CBCA gives that buyer 30 days from finding out to unwind the entire transaction. It is a closing-day risk specifically because it is the kind of thing a clean corporate search does not, by itself, reveal.
A buyer closes an asset purchase of a Saskatchewan retail business. The purchase agreement allocates part of the price to inventory and fixtures — a bulk sale under the province's own definition, since the seller is ceasing to carry on the business. Neither side arranges a Bulk Sale Clearance Certificate before closing, treating it as a formality the seller's accountant would handle afterward.
Eight months later, a provincial tax assessment arrives — not against the seller, who has since wound down and is difficult to locate, but against the buyer directly, under the statutory provision that makes the buyer liable for the seller's outstanding provincial tax debt where no certificate was obtained. The buyer's only genuine recovery option is a claim back against the seller personally, which is precisely the outcome the certificate exists to prevent in the first place — and precisely why it belongs on the closing agenda, not in a follow-up email.
Yes, but without a clearance certificate the buyer can become liable for that debt directly, in Saskatchewan, British Columbia and Manitoba alike, though each province structures the liability slightly differently. Obtaining the certificate before closing, or building a holdback against the risk, is the standard way to manage it.
Treat any wire instructions received by email as unverified until confirmed by phone, using a number obtained independently of that email — not a number or reply address contained in the same message. This is standard closing-day practice specifically because email-based wire fraud targeting real estate and business closings is a documented and ongoing risk.
Often yes in practice — a lawyer can undertake to obtain and register the discharge shortly after closing, allowing the transaction to proceed on trust conditions. But that shifts real risk onto whoever is relying on the undertaking, and it should be a deliberate decision on both sides, not a default when the discharge simply wasn't ready in time.
A short call is enough to walk through what your specific deal still needs before funds actually move.
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