Title insurance for share purchase transactions. Protection even when nothing changes on title.

When a share purchase transaction involves real estate, ownership on title remains unchanged. But risk can still remain.

FCT provides owner title insurance for the real estate component of share purchase transactions, helping protect clients with coverage similar to that available in an asset purchase transaction. This helps legal professionals manage risk and move complex transactions forward with confidence.

Contact our team

Complete the form and we’ll follow up based on your request.

Prefer to speak with us directly?
Call 1.866.804.3112.

Why title insurance still matters in a share purchase transaction

In an asset purchase, the buyer purchases the property directly and a transfer or deed of sale is registered on title.

In a share purchase transaction, the buyer purchases the shares of the corporation that owns the real estate. The corporation remains the registered owner of the land, so there will be no registered change to title. That can make title insurance easy to overlook.

However, no change on title does not mean there is no risk. Zoning issues, certain errors in governmental responses and other transactional risks can still exist. In some cases, the property may never have been protected by title insurance when the corporation first acquired it.

Because these issues can remain liabilities of the corporation that owns the property, they can have financial implications on the new shareholders after closing.

FCT can also help simplify the closing process by applying the same reduced due diligence and search requirements used in asset purchase transactions, helping legal professionals complete complex deals more efficiently. 

Key takeaways

Risk can remain

No title change does not mean no risk. The real estate component of the deal still requires review and title insurance protection.

Insure the real estate

FCT can insure the real estate component of a share purchase transaction, providing the same owner coverage available in an asset purchase transaction, even when ownership on title does not change.

Protect against key risks

Coverage includes certain errors in governmental responses, zoning issues, and FCT’s duty to defend against covered third-party claims.

Align coverage to closing

The corporation that holds title remains the insured. FCT can advance the Date of Policy to the share purchase transaction date when the corporation is already insured by FCT.

Address prior knowledge issues

FCT automatically includes the Non-Imputation Endorsement to ensure new shareholders are not penalized for certain issues known only to previous officers, directors or shareholders.

Think beyond deal size

Share purchase coverage can apply to both local business acquisitions and larger corporate deals with a real estate component. FCT insures the real estate value, which can make title insurance more cost-effective than clients may expect.

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For commercial real estate, corporate and M&A professionals

Whether you support the real estate component of a share purchase transaction or lead the broader corporate transaction, FCT can help you identify and address risk that may otherwise be overlooked.

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For commercial real estate lawyers and law clerks

Even when no transfer is registered on title, title insurance should still be considered. FCT can insure the real estate component of a share purchase transaction, providing the same owner coverage protection available in an asset purchase transaction.

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For corporate and M&A lawyers

A broader corporate deal can still carry real estate risk. When a share purchase transaction includes real estate, involving real estate counsel and FCT early can help identify available coverage and support a smoother path to closing.

What risk could look like after closing 

A corporation owns and operates a warehouse. The purchaser acquires all of the shares of the corporation. After closing, the municipality discovers that a large portion of the warehouse was converted into office space several years earlier without the required zoning approvals or variances.

The municipality may require the company to:

    • cease the non-conforming use
    • apply for a zoning amendment or minor variance
    • remove or alter the unauthorized improvements
    • pay fines and incur legal and consulting costs

Although the zoning issue arose before the share purchase, the corporation remains liable because it is the same legal entity. The new shareholders may bear the economic impact through reduced profitability, compliance and remediation costs, potential interruption of business operations, or a decrease in the value of their shares.


The best protection works together. Your expertise as a legal professional is essential in a share purchase transaction. FCT commercial title insurance policy complements that expertise by helping protect your clients against covered risks that may remain after due diligence is complete and the shares have been purchased. 

Webinar: Why title insurance matters in share purchase transactions

Join FCT Commercial Solutions for a practical overview of title insurance in share purchase transactions. Learn why coverage matters, when owner title insurance provides protection similar to an asset purchase transaction, how policy timing and the Non-Imputation Endorsement work, and when to involve FCT to help support a smoother closing. 

Learn more and register
Share purchase

Resources for your next share purchase transaction

Share purchase transactions: Why protection matters even when nothing changes on title

Get the key information legal professionals need to know when working on a share purchase transaction. This guide explains why title insurance still matters, what risks can remain, and how FCT can help protect the real estate component of share purchase transactions. 

Download the guide
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Legal experts recommend FCT for comprehensive coverage on commercial transactions

Use this resource to help explain the value of FCT’s commercial title insurance to your clients. It shows how title insurance complements legal due diligence and helps protect against  covered risks, including certain errors in governmental responses, work order and building permit issues, title and mortgage fraud, and FCT’s duty to defend covered claims.

Download the resource
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More than a policy

Share purchase transactions can be complex. FCT has the underwriting experience and commercial title insurance expertise to help you protect your clients and move transactions forward.

Even when you do everything right, risk can remain. FCT complements the work of legal professionals by helping protect against covered risks that may still exist after due diligence is complete.

With more than 30 years of experience supporting complex real estate transactions in Canada, FCT can help you navigate the real estate component of your next share purchase deal.

Share purchase transactions frequently asked questions

Can FCT insure a share purchase transaction involving real estate?

Yes. FCT can insure the real estate component of a share purchase transaction, providing the same owner coverage available in an asset purchase transaction, even though there is no transfer or ownership change registered on title.

Why consider title insurance if title does not change?

In a share purchase transaction, the corporation that owns the real estate remains the registered owner. However, title-related risks such as zoning issues, certain errors in governmental responses and other transactional risks can still exist. Those risks can remain liabilities of the corporation and may have financial implications for the new shareholders after closing.

Who is insured in a share purchase transaction?

The insured remains the corporation that holds title to the property. Where the corporation is already insured by FCT, the Date of Policy can be advanced to align with the share purchase transaction date, and the Non-Imputation Endorsement is included.

What is the Non-Imputation Endorsement?

The Non-Imputation Endorsement helps protect new shareholders from certain covered issues that were known only to previous officers, directors or shareholders.

What if the property was previously title insured?

If the property was previously title insured by FCT, the Date of Policy can be advanced to align with the share purchase transaction date, helping provide updated coverage for the new shareholders.

When should I contact FCT?

Contact FCT as early as possible when a share purchase transaction includes real estate. Early involvement can help identify available coverage and support the real estate component of the deal. Complete the form and we’ll follow up based on your request. You can also call 1.866.804.3112 to speak with us directly. 

Working on a share purchase transaction that involves real estate?

FCT can help you understand available title insurance coverage and protect the real estate component of a transaction.
Complete the form and we’ll follow up based on your request. Prefer to speak with us directly? Call 1.866.804.3112.

Tell us how we can help

Subject to certain exceptions, commercial title insurance policies equal or below $10M CAD are provided by FCT Insurance Company Ltd. Commercial title insurance policies above $10M CAD are provided by First American Title Insurance Company. Reference should be made to policy documents to confirm the insurer on any individual transaction. Services by First Canadian Title Company Limited. The services company does not provide insurance products. This material is intended to provide general information only. For specific coverage and exclusions, refer to the applicable policy. Copies are available upon request. Some products/services may vary by province. Prices and products/services offered are subject to change without notice. 

 

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