Published 14 August 2026 · Updated 29 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
In an asset sale the buyer purchases specific assets — equipment, leaseholds, goodwill — from your corporation; in a share sale the buyer purchases the corporation itself. Buyers often prefer assets, to limit inherited liabilities; incorporated sellers sometimes prefer shares, for the Lifetime Capital Gains Exemption.
Only your accountant can say which leaves you more after tax.
Price gets all the attention in a restaurant sale, but structure often decides how much of the price you keep. Two deals with the same headline number can produce very different after-tax outcomes depending on whether the buyer purchased your assets or your shares. This guide explains the fork honestly — including the parts where I have to hand you to your accountant. It is one chapter of the full series on how to sell a restaurant in Ontario.
What is an asset sale, and what is a share sale?
An asset sale is a purchase of specific things from your corporation: the kitchen equipment, the leasehold improvements, the goodwill, the name, sometimes the inventory. Your corporation is the seller, it receives the money, and it still belongs to you afterwards — along with whatever the buyer did not purchase, including most liabilities.
A share sale is a purchase of the corporation itself. The buyer acquires the shares, and with them everything the corporation owns and owes: the equipment and the goodwill, but also the tax history, the contracts and any liabilities, known or not. You personally are the seller, and the proceeds come to you as a capital gain on your shares.
How do the two structures compare?
| Question | Asset sale | Share sale |
|---|---|---|
| What is being bought? | Specific assets: equipment, leaseholds, goodwill, name | The shares of the corporation, taking it whole |
| Who is the seller? | Your corporation | You, as shareholder |
| What happens to liabilities? | Generally stay with your corporation unless assumed | Travel with the corporation to the buyer |
| Who tends to prefer it? | Buyers — they choose assets and limit inherited liabilities | Sellers of incorporated businesses, where the LCGE may apply |
| HST on the sale? | Normally applies to the assets, unless the parties jointly make the section 167 election | Different treatment — ask your accountant how your deal is affected |
| Contracts and lease? | Assignments usually needed, including landlord consent to the lease | Contracts stay in the corporation, but change-of-control clauses in the lease and other agreements can still require consent |
| Who confirms the tax outcome? | Your accountant | Your accountant — especially the QSBC tests |
What is your home actually worth today?
I will give you a real number based on comparable sales on your street — not an automated estimate. No obligation, and I will tell you plainly if now is the wrong time to sell.
Get my home valuation Call or text 833-330-1925
Jatin Dua, Broker of Record — RE/MAX Quantum Realty Inc., Brokerage. Not intended to solicit buyers or sellers currently under contract with another brokerage.
Why do buyers usually push for an asset purchase?
Two reasons, and they are the same reason from different angles. First, choice: an asset purchase lets the buyer take the equipment, the leasehold and the goodwill while leaving behind what they do not want. Second, protection: a corporation carries its whole history — tax positions, disputes, obligations that may not surface for years — and a buyer who purchases shares inherits all of it. Buying assets is how buyers limit that inheritance, and since Ontario repealed the Bulk Sales Act in March 2017, buyers protect themselves in asset deals through due diligence and indemnities rather than a statutory procedure.
Why might you, the seller, prefer a share sale?
Because of the Lifetime Capital Gains Exemption. When you sell shares that qualify as qualified small business corporation (QSBC) shares, the LCGE can shelter some or all of the capital gain from tax. The CRA’s guidance on the capital gains deduction puts the exemption at $1,250,000 for dispositions on or after June 25, 2024. An asset sale cannot use the LCGE the same way, because in an asset sale the gain is realized inside the corporation, not on your shares.
What does the structure change in the deal itself?
Plenty, beyond tax. In an asset sale, things must move one by one: the lease is assigned with the landlord’s consent — against the backdrop of section 23 of the Commercial Tenancies Act, which supplies a default that consent is not to be unreasonably withheld, subject to the lease’s own wording — supplier contracts are assigned or replaced, and the buyer applies to the AGCO to transfer the liquor sales licence through iAGCO. In a share sale the corporation keeps its contracts, but the change in ownership can still trigger consent requirements: change-of-control clauses in the lease, and the AGCO’s transfer rules, which its guidance ties to a prescribed change of ownership of the business, not just a change of licensee — see the licence transfer guide.
Your employees are also affected differently by each structure — the ESA continuity rules and what a buyer takes on are covered in what happens to your employees.
So which one should you choose?
You mostly do not choose alone — structure is negotiated, and the buyer’s preference for assets and your potential LCGE advantage in shares pull in opposite directions. Sometimes the gap is bridged in price: a buyer who wants assets may pay more to compensate a seller giving up a share-sale outcome, or vice versa. The negotiation only works if you know your numbers first, which means your accountant models both structures before the business goes to market, not after an offer lands.
How I help
Commercial and business sales, including restaurants, are part of my practice alongside residential work across the GTA. I run the confidential marketing and negotiate the deal — including the price implications of structure — while your lawyer and accountant handle the legal and tax execution and confirm what each structure actually leaves you.
The takeaway
Asset sale: the buyer picks what they take, your corporation keeps the rest. Share sale: the buyer takes the corporation whole, and the LCGE may shelter your gain — if your shares pass the QSBC tests, which only your accountant can confirm. Model both before you list, because structure is a negotiating lever, not an afterthought.
Thinking about selling your restaurant?
Tell me a little about the business and I will give you a confidential, no-obligation read on what it might be worth and how a quiet sale would work. No pitch, no obligation.
[email protected] · 833-330-1925 · Book a confidential consultation
Confidential. Reviewed personally and answered within 24 hours. I never share, sell or distribute your information.
Free tool — AI restaurant value estimator
Restaurant valuation
What is your restaurant
actually worth?
Restaurants don’t sell on revenue — they sell on what the owner takes home, multiplied by how easy the business is to hand over. Your lease and your rent do more damage or more good than anything on the menu. This weighs all of it in about two minutes.
Reading comparable restaurant sales…
Indicative business value
—
$0$0
Most likely sale price $0 · Implied multiple 0×
Where I’d list it
$0
Comparable restaurants sell for about 85% of asking. Price to that, not to hope.
How the number is built
Your owner earnings, multiplied by what buyers pay for a business like yours — then adjusted line by line.
What the market pays
Benchmarks from completed restaurant sales.
What a buyer will ask for
- Three years of financials — statements and tax returns, not just POS reports.
- The lease, with the assignment clause and every option in writing.
- Proof of your add-backs. Lenders reject the ones you cannot document, and that is the single biggest reason deals reprice.
- Equipment list showing what is owned outright and what is leased or financed.
- Licences — AGCO, food premises, patio, and whether each one transfers.
- WSIB, HST and payroll accounts in good standing.
Want the number a buyer
would actually sign?
Send me three years of financials and your lease and I will price it properly — normalised earnings, real comparables, a defensible asking price and a confidential marketing plan that never tips off your staff or your landlord.
Frequently asked questions
What is the difference between an asset sale and a share sale?
In an asset sale the buyer purchases specific assets — equipment, leasehold improvements, goodwill — from your corporation, which remains yours. In a share sale the buyer purchases the shares of the corporation itself and takes everything it owns and owes, with the proceeds coming to you personally as a gain on your shares.
How much is the Lifetime Capital Gains Exemption?
The CRA’s guidance on the capital gains deduction puts the LCGE at $1,250,000 for dispositions of qualified property on or after June 25, 2024. It applies to gains on qualified small business corporation shares — which is why it is relevant to share sales, not asset sales — and only if the strict QSBC tests are met.
Does my restaurant corporation qualify for the LCGE?
It depends on the QSBC tests, which examine how the corporation’s assets are used over defined periods and how the shares have been held. Some restaurant corporations qualify and some do not, depending on structure and what else the corporation holds. Only an accountant reviewing your corporation can confirm it.
Why do buyers prefer to buy assets instead of shares?
Because they can choose which assets they take and limit the liabilities they inherit. A corporation carries its full history — tax, contracts, potential claims — and buying shares means buying that history. Since Ontario repealed the Bulk Sales Act in 2017, buyers manage asset-deal risk through due diligence and indemnities.
What is your home actually worth today?
I will give you a real number based on comparable sales on your street — not an automated estimate. No obligation, and I will tell you plainly if now is the wrong time to sell.
Get my home valuation Call or text 833-330-1925
Jatin Dua, Broker of Record — RE/MAX Quantum Realty Inc., Brokerage. Not intended to solicit buyers or sellers currently under contract with another brokerage.
Sources
- CRA — Line 25400: Capital gains deduction. The $1,250,000 LCGE for dispositions on or after June 25, 2024. Accessed 13 August 2026.
- CRA GST/HST Memorandum 14-4 — Sale of a Business or Part of a Business. The section 167 election available in asset sales. Accessed 13 August 2026.
- BLG — The Bulk Sales Act (Ontario) repealed. Repeal effective March 22, 2017 under the Burden Reduction Act, 2017. Accessed 13 August 2026.
- Commercial Tenancies Act, R.S.O. 1990, c. L.7 (e-Laws). Section 23 on consent to assignment. Accessed 13 August 2026.
- AGCO — Section 7: Transferring a Liquor Sales Licence. Transfer required on a prescribed change of ownership of the business or a change of licensee. Accessed 13 August 2026.
Related reading
- How to sell a restaurant in Ontario: the complete process
- HST when selling a restaurant: the section 167 election explained
- How restaurant valuation actually works in Ontario
About the author — Jatin Dua
Jatin Dua is the Broker of Record at RE/MAX Quantum Realty in Etobicoke, Toronto. Commercial and business sales — including restaurants — are part of his practice, alongside residential work across the GTA. Content on this site is checked against primary sources — the CRA, the AGCO and ontario.ca — before publication.
Reach me at [email protected] or 833-330-1925.