Selling a family business is rarely a straightforward transaction. Personal ties, years of working side by side, and sometimes complex legal structures all converge at the moment of succession. In this context, the notary plays a concrete coordinating and instrumenting role: drafting the deeds, verifying titles, and ensuring that every document rests on solid legal footing before the final signing.
The Notary in a Business Transaction: A Coordinating Role
Contrary to what one might assume, the notary doesn't step in only at the very end of the process. From the moment the mandate is entrusted, the notary begins gathering the necessary information: the company's legal structure, title to any real property assets, existing security interests or hypothecs, and the nature of any commitments already in place.
The notary works in parallel with the other professionals involved in the transaction — accountant, business law attorney, and business broker — to ensure that the deeds being instrumented faithfully reflect the agreements reached between the parties.
What the Notary Prepares in Practice
Depending on the type of transaction chosen, the notarial deeds will vary. These may include:
- Deeds of sale of assets, where the buyer acquires the business's property, equipment, or contracts rather than its shares
- Deeds relating to units or shares, depending on the structure selected by the parties and their advisors
- Shareholder agreements, where a reorganization or partial transfer is involved
- Sworn declarations, releases, and other ancillary deeds that round out the transaction's documentation
Under Quebec law, notarial deeds carry authentic force, which gives them a particular legal standing. Me Petrulian will walk you through the details during your consultation.
Asset Sale vs. Share Sale: A Distinction That Shapes the Notary's Work
One of the first questions to settle in any business transaction is this: are the assets or the shares being sold? This distinction, typically determined with the guidance of the accountant and the attorney, has a direct bearing on the deeds the notary will be called upon to draft.
In an asset sale, the notary instruments the transfer of tangible or immovable property and ensures that existing security interests are properly discharged or assumed. In a share sale, the deeds focus on the transfer of ownership of the corporation's securities, and other types of notarial documents may be required depending on the circumstances.
Neither approach is universally preferable: everything depends on the particular situation of the business and the objectives of the parties involved.
Verifying Titles Early: Why It Matters
One of the most common sources of delay in a business transaction is the late discovery of irregularities in titles or the legal structure. An undischarged hypothec, an incomplete title deed, or an overlooked security interest can stall a signing for weeks.
This is why it is worthwhile to consult the notary early in the process, ideally before negotiations are too far along. In Laval as elsewhere, transactions that proceed without a hitch are often those where documentary verification was completed well in advance.
The Concrete Steps of the Notarial Process
A notarial intervention in this context generally follows a logical sequence:
- Receipt of the mandate: the notary is retained and receives the basic information about the transaction
- Information gathering: titles, registers, existing deeds, current security interests
- Coordination with other professionals: accountant, attorney, business broker
- Drafting of deeds: based on the nature of the transaction (assets or shares) and the agreements reached
- Signing of the deeds: in the presence of the parties, before the notary
- Publication or delivery of documents: registration in the land register if required, delivery of originals and certified copies
Each step demands careful attention, and rushing through any one of them can compromise the legal integrity of the whole.
Contact Groupe Synergie Notaires
Are you considering selling your family business? Groupe Synergie Notaires can guide you through the notarial steps of your transaction. Contact the firm at (514) 399-1009 or info@gsnotaires.com to schedule a consultation with Me Mirabela Petrulian.
Frequently Asked Questions
Is a notary required to sell a business in Quebec?
A notary is not mandatory for every component of a business transaction, but is often required for certain specific deeds — particularly when immovable property is involved. A consultation will help determine which deeds must be notarized based on your particular situation.
What is the difference between an asset sale and a share sale from the notary's perspective?
In an asset sale, the notary primarily instruments the transfer of property and the discharge of security interests, whereas in a share sale, the deeds focus on the transfer of the corporation's securities — two distinct types of intervention that depend on the structure chosen by the parties.
How long does the notarial process take in a family business sale?
The timeline varies depending on the complexity of the legal structure, the state of the titles, and how quickly information is provided to the notary; consulting the firm early in the process generally helps avoid unexpected delays.
This text is provided for informational purposes only and does not constitute legal advice. As each situation is unique, it is recommended that you consult a professional to obtain advice tailored to your particular situation.