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See how much you know about commercial law in the province of Alberta by determining whether the following statements are True or False. Click on each statement to get the answer.

Purchase agreement

Only a lawyer can ensure an agreement to purchase a business is done properly.

True. Each term of the contract has to be reviewed as it could have a tremendous effect on how a transaction closes. It is also important to ensure all concerns are addressed for both parties and hold backs are properly in place-for outstanding items past closing.

Landlord approval

Landlord approval is one of the most important steps in purchasing a business.

True. Obtaining landlord approval is often time consuming, but necessary to ensure there is no delay in your closing.

Rent

Base rent is the key consideration in any lease.

False. You need to consider both base rent, additional rent and percentage rent. Failure to consider all three may mean your rent will be higher than expected.

Assets versus shares

When buying a business, purchasing the assets is more risky than buying the shares.

False. Purchasing the assets is less risky than buying the shares.

WCB clearance

Pursuant to Section 132 of the WCB Act: the purchaser is liable to the Board for an amount that is equal to the amount due from the vendor to the Board.

True.

Share transfer

Shares transfer is less advantageous for the seller in terms of capital gains exemption.

False. Shares transfer is more advantageous for the seller in terms of capital gains exemption.

Gift certificates

Gift certificates are not a concern for the purchaser and seller of a business.

False. This is a liability that has to be taken into account in the calculation of the purchase price.