What documents do I need to sell my business in BC?
This answer covers the law of British Columbia.
Buyers usually ask for financial, corporate, lease, contract, employee and licence records, and having them ready smooths due diligence. What they ask for depends on whether you sell shares or assets.
Start with corporate records, since a buyer can search the company summary and Notice of Articles showing your current directors. Gather your CRA business number and program account details. Expect questions on liens: security agreements and commercial liens are recorded in the Personal Property Registry, and a discharge at closing can be required of your lender. If the business owns or holds an interest in land, a buyer may order a Land Title Office title search. Collect your lease and any land documents, since a contract respecting land is generally not enforceable without a signed writing, an act or acquiescence, or reasonable reliance.
For employees, buyers want service records, because employment is deemed continuous on a sale and the buyer takes on obligations to staff who stay, except where you end their employment before the sale or a trustee in bankruptcy sells. For tax, expect requests for PST records, since a buyer is told to obtain a PST clearance certificate, and for support of asset values, which the Province may ask for.
Key takeaways
- Corporate records matter because a corporate search shows a company summary and Notice of Articles with the current directors.
- Expect lien questions, since security agreements and commercial liens are recorded in the Personal Property Registry and a lender's discharge at closing can be required.
- Staff records matter because employment is deemed continuous and the buyer takes on obligations to employees who stay, unless you terminate them before the sale or a trustee in bankruptcy sells.
- Have PST records ready, since buyers are told to obtain a PST clearance certificate and the Province may ask for support for asset values.