Does the seller need to sign a statutory declaration on closing day?

A statutory declaration is a written statement of facts that the person signing solemnly declares to be true. In a business sale, whether one is needed is a question for the deal documents, so the first place to look is the list of closing deliverables in the purchase agreement, not a statute. If the agreement names one, the seller signs it at closing. If it names none, ask your lawyer whether you want one added before signing.

What the evidence statutes say a declaration is

Section 41 of the Canada Evidence Act lets a judge, notary public, justice of the peace, provincial court judge, recorder, mayor, commissioner authorized to take affidavits, or any other functionary authorized by law to administer an oath, receive the solemn declaration of a person who makes it voluntarily before them. In the form it sets out, the declarant solemnly declares the facts, conscientiously believing them to be true and knowing the declaration has the same force and effect as if made under oath. Ontario’s Evidence Act, s.43, uses the same form and lets any person authorized to take declarations in Ontario receive it. Other provinces run their own evidence legislation.

Where a closing requirement comes from

Those provisions describe how a declaration is made and received. Whether a sale needs one is a separate question, answered by the purchase agreement or by another statute. Ontario repealed its Bulk Sales Act on March 22, 2017, so that Act no longer supplies a requirement there. Ask your lawyer whether any statute in your province still applies to the sale of a business or its assets, and read what the purchase agreement itself asks the seller to sign.

What to settle before closing day

If the agreement calls for a declaration, agree its wording early so nobody is drafting at the signing table. The closing steps are set out in what actually happens on closing day.

• Who signs: the seller personally, or an officer of the selling corporation on its behalf.
• What facts it covers, and whether each one matches a representation the seller has already given in the agreement.
• Who will receive it, and whether that person is authorized to take declarations where the signing happens.
• Whether the buyer’s lender or another party has asked for a declaration of its own.