Closing date
The closing date is the day ownership of the business legally transfers from seller to buyer, once every closing condition in the definitive agreement has been satisfied and the purchase price has been paid. It is set in the agreement but frequently shifts as conditions take longer to satisfy than expected.
The closing date is the finish line of a business sale. On that date, funds move, the purchase agreement and any related documents are signed and delivered, and legal ownership of the shares or assets passes to the buyer. Everything before that point, from the letter of intent through due diligence, is aimed at reaching this day cleanly.
Why closing dates move
The date named in the definitive agreement is usually a target, not a guarantee. Financing approval, landlord consent to assign a lease, licence transfers, and other conditions precedent often take longer than either side expects. Most agreements include a mechanism to extend the closing date by mutual agreement, and an outside date after which either party can walk away.
What happens on the day
A typical closing involves a lawyer-managed funds flow, where the purchase price, any deposit already held, and payouts to lenders or other parties move in a coordinated sequence. Both sides usually rely on their lawyers to confirm every condition is satisfied before releasing funds and signing off.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Treadstone LawLegal commentaryConditions Precedent to Closing in an Ontario Business Sale Agreement
- 02Treadstone LawLegal commentaryHow Money Actually Moves on Closing Day in an Ontario Business Sale
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