Tag archives: restrictive covenant

Enforcement of restrictive covenants in commercial transactions

By Troy Ungerman (Toronto) on April 17, 2018 Posted in Employment and labour, M&A

Restrictive covenants are often a key mechanism by way of which the buyer of a business is able to protect the value of their purchase. Indeed, in a 2017 review of legal trends in Canadian private M&A, Thomson Reuters has reported that non-competition covenants were found in 52% of the closing conditions of share acquisition … Continue reading

Avoiding tax traps: don’t forget about non-competition agreements

By Troy Ungerman (Toronto) on February 11, 2016 Posted in Corporate finance, Tax

Non-competition agreements can be a valuable tool for purchasers who want to protect their investments in new businesses. However, non-competition agreements can have unintended and unexpected tax consequences, particularly to sellers who grant non-competition agreements to purchasers. The Income Tax Act (Canada) (the Act) contains specific provisions regarding the taxation of “restrictive covenants”, a broadly … Continue reading