Asset Sale vs Share Sale in Canada

In Canadian M&A, “asset sale vs share sale” isn’t just legal structure - it changes who takes on risk, how tax is paid, and what the business is actually worth after tax.

Buyers often prefer asset deals to avoid inheriting historical liabilities and to “step up” the tax cost of assets.

Sellers often prefer share deals because shares can qualify for the Lifetime Capital Gains Exemption (LCGE) if the company meets the Qualified Small Business Corporation Share (QSBCS) tests.

This guide explains what asset and share deals mean for both sides, the tax issues that move price, where GST/HST can surprise you, and how to negotiate the structure without killing the deal.

In this in-depth blog post we cover:

• Asset sale vs share sale: the basics

• What buyers usually prefer (and why)

• What sellers usually prefer (and why)

• The LCGE and QSBCS: when a share sale can be worth more

• Purchase price allocation: why it changes tax for both sides

• GST/HST in an asset sale (and the Section 167 election)

• Practical negotiation levers (price, holdbacks, indemnities)

• …and more!

Let’s dive in!

Thank You For Reading. See You Next Time!

Think Team🙏