[Verse 1]
When Acme Corp wants FreshCo's machines and land
Asset purchase keeps the corporate shell unmanned
Buyer steps up depreciation, writes off goodwill slow
Seller faces recapture pain, capital gains below
But shares mean different mathematics dance
Buyer inherits tax positions, takes inheritance stance
[Chorus]
Asset or share, buyer beware
Due diligence unveils what's hiding there
Earnouts stretch the purchase price
Section twenty-two rolls the dice
Non-compete payments, fifty-six-four
Canadian tax law opens every door
[Verse 2]
Digging through the files, hunting tax exposures deep
Unreported income, penalties that make you weep
Reassessments lurking, installment debts unpaid
Scientific research credits wrongly displayed
CRA audits pending, GST remittance gaps
Due diligence protects you from these hidden traps
[Chorus]
Asset or share, buyer beware
Due diligence unveils what's hiding there
Earnouts stretch the purchase price
Section twenty-two rolls the dice
Non-compete payments, fifty-six-four
Canadian tax law opens every door
[Bridge]
Earnout triggers when performance hits the mark
Contingent consideration lights the taxable spark
Seller reports income when conditions crystallize
Buyer deducts expenses, watches basis rise
[Verse 3]
Non-compete agreements, seller signs away
Five years of silence for substantial pay
Section fifty-six-four splits the stream in two
Employment income, capital gain queue
Meanwhile section twenty-two election calls
Bad debt reserve transfers through receivable walls
[Final Chorus]
Asset or share, buyer beware
Due diligence unveils what's hiding there
Earnouts stretch the purchase price
Section twenty-two rolls the dice
Non-compete payments, fifty-six-four
Canadian tax law opens every door
Every door, every door