Under Canadian securities laws, reporting issuers are required
to make periodic disclosure and timely disclosure upon the
occurrence of specific events. One of the timely disclosure
obligations is the requirement for a reporting issuer to file
a business acquisition report (BAR), in prescribed
form, upon the completion of a "significant" acquisition
of a "business".
An acquisition is considered significant where the acquisition
meets one of the following significance tests: investment, assets
or profit or loss. For venture issuers, the relevant tests are
assets and investments. Whether the relevant test is met is based
on financial statements. Notably, however, if an acquisition
qualifies as a reverse takeover or satisfies certain
optional tests, a company may not be required to file a
A company must file a BAR within 75 days of the acquisition
unless the acquired business's most recently completed
financial year is within 45 days of the acquisition in which case
the filing deadline is either 90 or 120 days.
The BAR must include the acquired business's financial
statements and such statements must be accompanied by an
auditor's report that includes an unmodified or unqualified
opinion, unless the opinion relates to inventory, in which case it
may be qualified.
In addition to prescribed exemptions, regulators may grant
case-by-case exemptions from the requirements to file the BAR or
other related requirements. One recent example is seen in
Endeavour Silver Corp., Re (36 OSCB 2889). In that case,
an auditor was unable to verify certain matters as a result of the
acquired business's lack of historical information as well as
the passage of time which prevented any verification of such
information. As a result, the auditor was unable to provide an
unqualified opinion relating to such matters. Nonetheless, the
British Columbia Securities Commission, as the principal regulator,
provided the applicant relief from the requirement to provide an
unqualified opinion on the basis that the applicant (i) could
otherwise comply with the requirements for the BAR and (ii) that
the BAR would contain sufficient alternative information about the
The author would like to thank Nader Hasan,
articling student, for his assistance in preparing this legal
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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