What are the steps to selling my business in BC?
This answer covers the law of British Columbia.
Selling a business in BC usually moves from preparing the business, to finding buyers, to confidentiality, an offer, due diligence and closing, and what you do at each stage depends on whether you sell assets or shares.
Before you market it, tidy your records and find out what a buyer will find. Security agreements and commercial liens registered against your business assets show up in a Personal Property Registry search, but builders' liens, family maintenance liens and some other liens are filed with other agencies, so that search alone does not reveal every lien. If your lender holds a registration, you can give a written demand to amend or discharge it, and the lender must register a change within 40 days. Tax also shapes the choice of structure: a share sale does not change the tax values of the company's assets.
In an asset sale, the price is allocated to each asset at fair market value, with the remaining balance attributed to goodwill, and the allocation should match what the vendor reports. A claim after closing on a misrepresentation or breach of warranty generally must start within 2 years of discovery. Speak with a lawyer and accountant before you sign an offer.
Key takeaways
- Check what a buyer will find first, including liens, but keep in mind that a Personal Property Registry search shows only some of them, because builders' liens, family maintenance liens and some other liens are filed with other agencies.
- Your lender can be asked in writing to amend or discharge a registration, and it must register the change within 40 days.
- Whether you sell assets or shares changes the tax picture, including how the price is allocated.
- A claim after closing on a misrepresentation or breach of warranty generally must start within 2 years of discovery.