It is common for a sole proprietor to later decide to change the legal structure of its business to that of a legal corporation. This owner will then have to sell the assets of the business to the corporation, a transaction known as a “rollover," which has certain tax advantages.

This asset purchase and rollover agreement template contains all the necessary legal, financial and fiscal provisions to complete such a business transfer to its greatest advantage.

This template is to be used to sell the assets of a business, not shares. For exemple, when the vendor is a sole proprietor and wishes to sell the assets of the business to a legal person in order to change its business's legal structure to that of a corporation.

This rollover agreement provides for the sale of the assets and, therefore, does not require the use of an asset purchase offer (see template Y02250). For this reason, the asset purchase and rollover agreement must be detailed and thorough.

With regard to the rollover, the Canada Income Tax Act authorises the transfer of some assets to the corporation without an immediate tax effect. An individual who decides to change from a sole proprietorship to a corporation created for such purpose will not have to pay taxes at the time of the rollover.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Activities
0.01.02 Agreement
0.01.03 Breach
0.01.04 Closing Date
0.01.05 Encumber or Encumbrance
0.01.06 Goods
0.01.07 Intellectual Property
0.01.08 Law
0.01.09 PARTY
0.01.10 Person
0.01.11 Property
0.02 Entire Agreement
0.03 Applicable Law
0.04 Non-Compliance
0.04.01 Severability
0.04.02 Substitute Provision
0.05 Miscellaneous
0.05.01 Cumulative Rights
0.05.02 No Waiver
0.05.03 Time and Days
a) Time of the Essence
b) Computation of Time
0.05.04 Financial References
0.05.05 Cross-References
0.05.06 Gender and Number
0.05.07 Headings
0.05.08 Accounting References
1.00 PURPOSE
1.01 Sale
1.02 Conditions
1.02.01 Required by VENDOR
1.02.02 Required by PURCHASER
1.02.03 Choice
2.00 CONSIDERATION
2.01 Price
2.02 Allocation
3.00 TERMS OF PAYMENT
3.01 Purchase Price
3.02 Promissory Note
3.02.01 Issuance
3.02.02 Scope
3.03 Interest
3.04 Issue of Shares
3.04.01 Number and Class
3.04.02 Attached Rights
3.05 Agreed-upon Amount
3.06 Adjustment
4.00 SECURITY
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
6.00 REPRESENTATIONS AND WARRANTIES OF VENDOR
6.01 Status
6.02 Marital Status
6.03 Regulation 45-106
6.04 Ownership
6.05 Authority
6.06 Binding Agreement
6.07 Fair Market Value
6.08 Quality
6.09 Independent Legal Advice
6.10 Operations
6.11 Legal Proceedings
7.00 REPRESENTATIONS AND WARRANTIES OF PURCHASER
7.01 Incorporation
7.02 Approval
7.03 Authority
7.04 Binding Agreement
7.05 Regulation 45-106
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Election
8.01.01 Undertaking
8.01.02 Documents to be Filed
8.02 Subsequent Formalities
8.03 Indemnification
8.03.01 Scope
8.03.02 Procedure
8.03.03 Duration of Indemnification Period
8.04 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF VENDOR
10.00 DUTIES AND OBLIGATIONS OF PURCHASER
11.00 SPECIAL PROVISIONS
11.01 Remedies
11.01.01 Choice
11.01.02 No Limitations
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Choice of Forum
12.03 Counterparts
12.04 Amendment
12.05 No Waiver of Rights
12.06 Electronic Transmission
13.00 EFFECTIVE DATE
14.00 SCOPE

SCHEDULE A – EXCERPT OF A RESOLUTION OF PURCHASER
SCHEDULE 0.01.11 a) – REAL PROPERTY
SCHEDULE 0.01.11 c) – EQUIPMENT, MACHINERY AND TOOLS
SCHEDULE 0.01.11 d) – ROLLING STOCK
SCHEDULE 0.01.11 e) – OFFICE FURNITURE AND OTHER MOVABLES
SCHEDULE 0.01.11 f) – ELECTRONIC AND COMPUTER EQUIPMENT
SCHEDULE 0.01.11 j) – PERMITS AND LICENCES
SCHEDULE 0.01.11 h) – CUSTOMERS
SCHEDULE 0.01.11 k) – INTELLECTUAL PROPERTY
SCHEDULE 0.01.11 l) – LEASE AND INTERVENTION OF LESSOR
SCHEDULE 2.01 – ADJUSTMENTS
SCHEDULE 3.01 – TERMS AND CONDITIONS OF PAYMENT
SCHEDULE 3.02 – PROMISSORY NOTE
SCHEDULE 6.02 – INTERVENTION BY SPOUSE OF VENDOR