In the event of a share purchase, the buyer also assumes the tax liabilities of the target entity, including any undisclosed or unknown debts resulting from the incorrect reporting of a performance item in the past. In addition, the credit rating agency may provide the covered entity for additional taxes if it does not agree with any of its previous tax returns (including the pay slip, GST and other tax returns), subject to the prescribed rules. This means that all future tax matters of the target company are the responsibility of the buyer, so it is important for the buyer to gain comfort on the historical listing practices and positions of the target company. Sellers generally prefer the sale of shares because they receive a “clean break” from the target company, since total assets and liabilities are sold. In addition, capital gains from the sale may be eligible for the lifetime capital gains exemption, which significantly reduces the tax bill for the sale. Our templates are designed to provide a complete and exhaustive list of the first due diligence requests. However, the proposals and the information contained there in them do not constitute legal advice. You are neither complete nor specific to your transaction. The templates have been designed to provide the seller with general information that gives the buyer a complete overview of the destination and its activity and operations. You should check each template before using it, and it may be necessary to modify it to make sure it is appropriate and relevant to your circumstances. The information provided by the seller will likely raise other questions that will focus on certain aspects of the target company`s business and the issues identified during the due diligence process. If the purchased asset contains creative or original work, the buyer should seek any reflection on intellectual property. The buyer must demand from the owner: Financial due diligence is necessary regardless of the type of purchase, although the volume varies depending on the size and nature of the business….