Your Asset Purchase/Sale Just Got Easier!

The Bulk Sales Act (“BSA”) has been repealed.

On March 22, 2017, the Burden Reduction Act, 2017 (“BRA”) received royal assent. Schedule 3 of the BRA repeals the BSA after 100 years of constraining the ability of sellers to sell “stock in bulk” outside of the usual course of business or trade.

Without the onerous requirements of the BSA, purchasers and sellers will have more certainty with respect to their transactions – as a failure to comply with the provisions of the BSA could have resulted in the sale being declared void – and asset purchase transactions should be easier and faster.

One of the stated goals of the BRA is to “cut red tape” and “make Ontario one of the easiest places in North America to do business”. Ontario was the last Canadian jurisdiction to have an act respecting bulk sales.

While this is certainly a benefit for parties to the transaction, creditors need not be concerned that their interests have been ignored. Since the enactment of the BSA, additional legislation has been put in place to provide creditors with a number of more effective ways to protect their interests.     

SmithValeriote’s Business Law team is available to help purchasers, sellers and creditors navigate their rights and obligations with respect to asset purchase transactions.