SECURITIES FILINGS AND SEARCHES
Bulk Sales Act Searches- Ontario Only
A sale “in bulk” happens when a business, outside of regular course of business, sells large quantities of its stock or sells its assets an equipment which belong to business. The Bulk Sales Act protects the creditors of a business from the loss of the sold assets/equipment by requiring the business owner to follow specific procedures set out in the Act in cases where sales happen outside of a regular course of business.
As such, in cases where a business wants to sell “in bulk”, he must provide an Affidavit that states that all creditors have been paid or that they will be paid from the proceeds of the sale.
A ‘Bulk Sales search’ is conducted in order to determine if a bulk sales Affidavit has been filed with the Superior Court of Justice.
A bulk sales affidavit filed pursuant to the Bulk Sales Act. The required time period for filing is 5 calendar days from the date of sale excluding the day of closing. The Bulk Sales Act is applicable to Ontario only.
The following must be provided to file a Bulk Sales Affidavit:
Two original copies of the Bulk Sales Affidavit
Two original copies of the Statement as to Sellers’ Creditors
Two Court Back Pages for each set of documents; and
Cheque made payable to the Minister of Finance for $75.00
For filings outside of Toronto, Bulk Sales filings are sent by overnight courier to the appropriate office for filing.
Section 427 Bank Act Searches
When a Canadian Bank lends money to a person or a business, the borrower must sign a particular document that provides the bank the first preferential lien on the goods or equipment. When this has been done, the Bank registers a ‘Notice if Intention’ to take the goods as security, to perfect its security interest.
A ‘Bank Act Search’ is conducted in order to determine if a company or individual is under an agreement with their bank as described above.
A Notice of Intention or Certificate of Release filed with the CSRS (Canadian Securities Registration System) pursuant to the Bank Act.
The following must be provided to complete a bank act filing:
Two original copies of the Notice of Intention/Release on Bank Letterhead; and
Five digit Transit Number of the Bank referred to in the Notice of Intention/Release.