Ontario Barrister and Solicitor Practice Exam

What is a key difference between asset acquisition and share acquisition regarding employees?

1. Share acquisition requires employment contracts to be renegotiated

2. Asset acquisition leads to automatic termination of employees

3. Share acquisition generally does not disturb pension and benefit plans of employees

4. In asset acquisition, employees automatically transfer to the new owner

The correct answer is: Share acquisition generally does not disturb pension and benefit plans of employees

A) Share acquisition may require employment contracts to be renegotiated, but not always. B) Asset acquisition does not always lead to automatic termination of employees. D) Asset acquisition may require the new owner to offer employment to the current employees, but they may have the option to decline. Share acquisition does not always involve the new owner hiring the existing employees. The key difference between asset acquisition and share acquisition regarding employees is that in share acquisition, the pension and benefit plans of employees generally do not get disturbed. This means that employees may continue to receive their existing benefits and may not have to negotiate new contracts for these benefits. In contrast, in asset acquisition, employees may not only have to renegotiate their employment contracts, but also their pension and benefit plans may be affected depending on the decisions made by the new owner. Therefore, asset acquisition can be more disruptive for employees in terms of