Financing and selling a business


In recent years, the Lavery Capital team has advised over one hundred businesses and participated in numerous corporate financing transactions, exit transactions and other mergers and acquisitions transactions.

Corporate financing

We help entrepreneurs finance their businesses at all stages of the corporate life cycle: start-ups and early-stage companies with seed, pre-seed and Series A financing; later-stage companies with Series B financing, Series C financing and growth capital; and established companies with project financing.

If your business is in need of financing, whether to build its product or its team, to accelerate growth or to finance a specific project, our team can help you structure and close your financing, including the negotiation of transaction documents.

We can assist you with equity financing, convertible debt financing or other convertible instruments (KISS, SAFE). If you are considering bank financing through a traditional loan, line of credit or letter of credit, 

Our bank financing team can help you.

Sale of a business

If you are looking to sell your business, the Lavery Capital team can assist you with all aspects of the transaction, from developing a strategy to planning and fine-tuning the corporate and tax structure applicable to the sale transaction.

Additional expertise

At Lavery, our firm is made up of professionals practising in a wide range of legal fields. We can advise you on all the legal aspects of your business (including labour law, intellectual property, commercial agreements and regulatory compliance), as well as in preparing for a financing round or the sale of your business, reviewing its legal situation and preparing for due diligence by investors or potential buyers.

We also have extensive experience in corporate and tax structuring, and our team of tax lawyers regularly works with entrepreneurs to align their business structure with their operations or optimize it in order to sell.

Our approach

We know that entrepreneurs need support that goes beyond what outside legal counsel typically provides, which is why we tailor our approach to your business needs so you can achieve your objectives.

We follow the most stringent legal services industry standards in our work. Our clients can count on the fact that we work hard, follow the highest quality standards and act as true business partners.

Much more than just a law firm, we are also a trusted strategic advisor, and we offer support that goes beyond simple legal advice. Our approach is pragmatic, always placing our clients’ business needs at the forefront and working closely with them to deliver creative, practical and accessible advice.

Lastly, with our 360approach and our in-depth knowledge of the investors in the Quebec and Canadian markets, we can make sure you are prepared and work effectively with you in your business financing.

  1. New rules will make it easier to transfer family businesses

    The 2023 Federal Budget (the “Budget”), tabled on March 28, 2023, proposes amendments to certain provisions of the Income Tax Act (ITA) that would make “genuine” intergenerational business transfers no longer subject to the anti-avoidance rules of section 84.1 and allow the transferor to benefit from their capital gains exemption. To do so, the Budget establishes new general conditions that the parties must meet, as well as specific conditions that apply to “immediate” transfers, or those made over a period of no more than 36 months, and “gradual” transfers, or those that take five to ten years to complete. The general conditions that the parties must meet when disposing of a company may be summarized as follows: The vendor must be an individual other than a trust. Immediately prior to the transfer, the vendor, alone or with their spouse, must control the currently operating company. At the time of the transfer, the purchasing company must be controlled by one or more of the vendor’s children, who must be at least 18 years of age. The notion of “child” also includes stepchildren, grandchildren and nieces and nephews. The shares of the company being transferred must be qualified small business corporation (QSBC) shares or shares of the capital stock of a family-farm or family-fishing corporation (QFFP). The specific conditions relate to the transfer of control, economic interests and management of the company, and vary from case to case. FOR AN IMMEDIATE TRANSFER (36-MONTH TEST) In the case of immediate transfers, de jure control (being the holding of the majority of shares having voting rights), and de facto control (which includes the economic influence making effective control of the company likely), must be transferred at the time of sale. Voting and participating shares not transferred to the purchasing company at the time of sale must be transferred within the following 36 months, such that after this period, the transferor may hold only preferred shares, that is, non-voting or non-participating shares for an indefinite period (vs 10 years in the case of a gradual transfer). Also, the child, or at least one member of the group of children, must participate in the family business on a regular, significant and continuous basis for a minimum period of at least 36 months after the transfer is made. Lastly, the transferor must take reasonable steps to transfer the business’s administration and know-how and completely cease to manage the business before the 36th month after the transfer was made. FOR A GRADUAL TRANSFER (FIVE–TO–TEN–YEAR TEST) If the transfer is gradual, only de jure control must be transferred at the time of disposition. The balance of the voting and participating shares not transferred at the time of disposition must be transferred within 36 months of the first transfer. However, under the rules respecting gradual transfers, the transferor will only be bound to transfer de facto control of the business within 10 years of the initial transfer. In the case of a transfer of economic interests, the vendor is expected to significantly reduce the value of the equity and advance they have invested in the business within 10 years of the initial sale. The same requirement for a child’s active participation in the company and transfer of the management of the business apply, but this time for a period of 60 months after acquisition. PREVIOUS RULES (Bill C-208) The provisions of the 2023 Federal Budget have the effect of setting aside certain requirements of Bill C-208 applicable to the realization of a capital gain. Under Bill C-208, for the transferor to benefit from their capital gains exemption, the operating company and the purchasing company could not be amalgamated within 60 months of the sale. The bill also required that an independent assessment of the fair market value of the company’s shares be filed with the Canada Revenue Agency, along with an affidavit signed by the vendor. However, as of January 1, 2024, these criteria are no longer applicable. An assessment will no longer be required, although under section 69 of the ITA, the transfer will still have to be made at fair market value. The 2023 budget (reinforced by the 2024 Federal Budget) also introduces new rules for the alternative minimum tax, a temporary tax that the transferor in an intergenerational business transfer often has to pay. To avoid having this temporary tax becoming permanent, it’s important to understand the subtleties of these new rules. Our team of tax professionals will be happy to help you and answer any questions you may have about these new legislative changes.

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  1. Finance and M&A: Lexpert Recognizes Four Partners as Leading Lawyers in Canada

    On April 17, 2024, Lexpert recognized the expertise of four of our partners in its 2024 Lexpert Special Edition: Finance and M&A. Josianne Beaudry, Étienne Brassard, Jean-Sébastien Desroches and Édith Jacques now rank among Canada's leaders in the financial sector and in M&A. Josianne Beaudry’s practice is primarily focused on securities law, investment funds and mining law. She also advises financial sector participants on the application of regulations relating to securities and corporate governance. Josianne assists clients carrying out public and private financings, corporate reorganizations, as well as mergers and acquisitions. She also helps publicly traded companies maintain their reporting issuer status. Étienne Brassard practices business law, more specifically corporate financing, mergers and acquisitions and corporate law. In his practice, he advises local and international businesses in relation to all forms of private financing, from traditional or convertible debt to equity investments. He has thus developed extensive expertise in setting up complex financing structures, in both operational and transactional contexts. Jean-Sébastien Desroches practices business law and focuses primarily on mergers and acquisitions, infrastructure, renewable energy and project development as well as strategic partnerships. He has had the opportunity to steer several major transactions, complex legal operations, cross-border transactions, reorganizations, and investments. Édith Jacques is a partner in Montréal's Business law group. She specializes in mergers and acquisitions, commercial law, as well as international law and acts as business and strategic consultant to mid- and large-size companies.

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