
Employment Law Advice When Buying And Selling A Business
When buying or selling a business, it is necessary to calculate the number of tangible and intangible assets in order to negotiate a fair price.
Often, it’s easy to forget the potential costs associated with changing the current workforce, but failing to consider that calculation can be costly.
Buying or selling a business almost always involves the transfer of employees. Both parties must understand which employees are likely to be retained, whether new contracts are required and what severance obligations may be triggered.

What You Need To Know
If you’re considering buying or selling a business, there are a few things you must know:
- Under the Employment Standards Act, the years of service of the seller’s employees flows through to the buyer. This will increase the costs to the buyer of any future termination and severance obligations
- In many circumstances our common law courts will also recognize the past years of service, increasing the liability for the buyer in terms of its expanded obligation under the common law to provide reasonable notice
- Knowing your potential liability DURING negotiations and prior to closing allows both buyer and seller to develop strategies to manage their respective current and future potential liabilities, and to make adjustments in the agreement to avoid costly surprises down the road

How We Can Help
Morrison Reist Krauss can assist with due diligence in helping you calculate human resource costs associated with the purchase or sale of a business. Our process includes:
- A risk analysis to determine potential exposure
- Calculating the liability associated with terminations
- Effective and compliant implementation of terminations
- Developing new employment contracts and employee agreements for employees to be retained
- Strategizing the transition of employees from seller to buyer
Don’t wait until after you’ve made a handshake deal to understand how employee costs impact the value of the business. Contact Morrison Reist Krauss today to ensure you’re agreeing to a fair valuation and to strategize a compliant employee transition.
Call today: 519.576.5351 or Toll Free: 1.800.354.5723