In our
July 2016 M&A Law Update, we asked the question: Could this
finally be farewell to the last remaining bulk sales legislation in
Canada?
We are pleased to report that the answer is (finally) yes. On
March 22, 2017, Bill 27, entitled the Burden Reduction Act, 2017,
received Royal Assent in the Ontario Legislature and Schedule 3,
Bulk Sales Act Repeal, came into force resulting in the repeal of
the Bulk Sales Act (Ontario) (the "BSA") and making
consequential amendments to other statutes.
The Ontario M&A community should welcome the repeal of the
BSA with open arms. Originally enacted approximately 100 years ago,
the BSA was designed to protect unpaid creditors in the event the
debtor business sold all of its assets in bulk. More recently,
compliance with the BSA has been seen as a needless, burdensome and
costly exercise. In fact, it had become common practice for parties
to agree to waive compliance with the BSA and provide indemnities
in lieu of complying.
