Closing mechanics in a Canadian business deal

Everything that happened during negotiation and due diligence has to converge into a single day that actually works, every condition satisfied, every dollar accounted for, every document signed in the right order. Closing day looks simple from the outside: money changes hands, the business changes owners. In practice it’s a coordinated sequence with real room for something to go wrong if it isn’t planned carefully in advance, which is why experienced lawyers on both sides treat it as its own project, not an afterthought once the purchase agreement is signed.

Confirming every condition precedent is actually satisfied

Before anything moves, both sides confirm that every condition precedent in the purchase agreement has genuinely been met or formally waived, financing confirmed and funded, third-party and landlord consents in hand, due diligence items resolved. Closing on a condition that's only "basically" satisfied, rather than actually confirmed in writing, is a common source of disputes that surface weeks or months later, once it's far more expensive to fix than it would have been to simply wait a day.

How the money actually moves

Funds typically flow through a lawyer’s trust account rather than directly between buyer and seller, giving both sides a neutral party responsible for disbursing money only once the documents needed to release it are actually in place. The buyer’s financing, its own funds, a lender’s advance, sometimes a vendor take-back netted against the price, arrives in trust, and from there it’s disbursed in a specific order: closing costs, any secured creditors being paid out and discharged, and the balance to the seller. Getting this sequence wrong, or moving money before a discharge is confirmed, is exactly the kind of mistake a solicitor’s trust account procedures exist to prevent.

What actually gets delivered on closing day

• Corporate resolutions authorizing the sale, on both the buyer’s and seller’s side where either is a corporation.
• A bill of sale for an asset deal, or a share transfer and updated minute book for a share deal.
• Assignment agreements for any leases, contracts or intellectual property being transferred.
• Releases and discharges from any secured creditors being paid out as part of closing.
• In Ontario, a WSIB clearance certificate confirming the corporation has no outstanding workplace safety insurance premiums owing — other provinces run their own equivalent workers' compensation clearance process.
• Confirmation of corporate status and good standing, checked shortly before closing rather than relied on from an earlier point in the process.

Simultaneous versus sequential closing

Most small business sales close simultaneously, signing and closing happen on the same day, with funds and documents exchanged together. Larger or more complex deals sometimes sign first and close later, once specific post-signing conditions like a regulatory approval or a third-party consent are satisfied. A sequential closing needs its own careful drafting, since the parties are legally committed to close before every condition is actually met, which shifts risk in ways both sides need to understand going in. Buyers and sellers should agree, early, which approach the deal actually needs, rather than defaulting to a simultaneous closing out of habit when the deal’s own conditions call for something else.

Holdbacks and post-closing adjustments

It’s common for part of the purchase price to be held back at closing, in escrow, or simply withheld by the buyer, to secure a post-closing price adjustment based on final working capital numbers, or to secure the buyer’s indemnification rights if a representation later turns out to be false. These amounts, and exactly when and how they’re released, need to be spelled out precisely in the purchase agreement, since a vague holdback provision is one of the more common sources of a dispute after closing has otherwise gone smoothly.

What commonly goes wrong on closing day itself

The most frequent closing-day problem is a document or a condition that everyone assumed was ready turning out not to be, a landlord’s consent still pending, a payout figure from a lender that arrives later than expected, a signature that can’t be obtained until the last minute. A second common issue is funds arriving in trust later in the day than planned, compressing the window to actually complete disbursement before financial institutions close. Building in a buffer, confirming every deliverable the day before rather than the morning of, and having every party’s lawyer reachable throughout the day are simple habits that prevent most of what actually goes wrong. None of these problems are unusual or unpredictable — they show up on a large share of closings precisely because the day involves coordinating several independent parties, each working to their own schedule, against a single fixed deadline.