In Canada, after a decision is made to sell a business, you have to take a decision on the two main options of selling business available. These two main options are: sale of business shares and sale of business assets. For each option that you may choose, it has its own advantages and disadvantages. In my opinion, sale of business shares is more beneficial to an individual. Some of the benefits one can enjoy are;
- You get to sell your business together with all its liabilities.
- Sale of business shares does not require any public notice the process can be carried confidentially.
- Unlike the sale of business assets, the sale of shares require simpler processes of documentation thus making it is an easier process.
- There are capital gain exemptions by selling shares.
If you are intending to sell a business in Canada it is very advisable to know the tax obligations of the business, and if there are any obligations that are tied to the business when they are selling it. For easier process to take place, the share sale process needs two main procedures for the investors to have faith in them. They are;
a. Make the process confidential:
In any existing and/or upcoming business, confidentiality is one of the key factors any investor would put in mind when intending to buy a business. Confidentiality is more important if a company has lots of stakeholders who may be affected by the decision made to sell a business. Some of the greatest ways that the sale of business shares can be kept confidential are; the relationship with the stake holders, i.e. employees, suppliers, financial and legal institutions and the customers of the organization. The investors look at the ownership of the company and if by any chance there is a possibility of a change in its ownership, they will be a bit unconvinced. Having a stable ownership enables the business owners to have unique abilities and relationships with the stake holders. This is very important to sell your business with a competitive image in the eyes of the prospective investors.
b. Ensure that all the legal procedures are followed:
Selling a business takes so much of time, effort as well as other resources. Following the right legal procedures helps greatly in the time the selling process takes. When selling a business in Canada, according to the set Canadian regulations, a lot prospective investors consider all the details of the documentation of a business. This is a very important procedure as; it enables the prospects to eliminate the cases of fraudsters, it helps the potential investors to make the right and wise decisions. When selling a business, the most important procedures that should never be omitted are; All the GST, tax and CPP accounts should be closed, According to the labor law in Canada, when transferring the ownership of a business, all the employees’ contracts and the allowances involved should be terminated. The business licenses and other supporting certificates should be kept updated. Eventually, the sale process should happen in a written sale agreement.
Ignoring these two main procedures can cause the whole process to collapse and having them in mind, it not only helps you to sell your business fast, but you are able to sell at a great price. The documents also serve as the entrepreneurs’ testimonials thus the potential investors have faith in you. Businesses buy sell website is one of the greatest and reputable platforms where the success of the sale of business is paramount. Engaging them in your process enables the process to run smoothly and fast.