What happens after my offer is accepted?

An accepted offer is the start of the formal process, not the end of it. Most Canadian small business deals move through a letter of intent, a due diligence period, contract negotiation, and a closing that depends on a series of conditions being satisfied along the way.

The letter of intent sets the framework

A letter of intent lays out the price, structure, and key terms both sides have agreed to in principle, usually with most of it non-binding except for confidentiality and exclusivity provisions. It gives both parties a shared reference point before either side spends real money on lawyers and accountants for a deal that might not close.

Due diligence verifies what you were told

During due diligence you and your advisors confirm the seller’s financial statements, legal standing, contracts, and liabilities, typically over several weeks depending on the size and complexity of the business. This is when most deal-changing discoveries happen, and it’s why a purchase agreement should include a right to walk away or renegotiate if something significant turns up.

Negotiating the purchase agreement

The purchase agreement is the binding document that replaces the letter of intent, setting out representations, warranties, indemnities, and any holdback or escrow terms that protect you after closing. This is negotiated in parallel with, or right after, due diligence, since what you find often changes what protections you ask for.

Satisfying closing conditions

• Financing approval, if the deal depends on a loan, needs to be confirmed in writing before you’re obligated to close.
• Landlord consent to a lease assignment is often a condition, and it can take longer than either side expects.
• Any regulatory licence or permit transfer needs to be confirmed as achievable before the closing date is locked in.