Should I get a WorkSafeBC clearance letter before buying a business in BC?
This answer covers the law of British Columbia.
It is sensible to ask for a WorkSafeBC clearance letter before you buy a business with employees, because unpaid premiums are the kind of seller debt a buyer wants to know about before closing. The exact rules on whether those amounts can pass to you, and how to request and rely on a letter, are worth confirming directly with WorkSafeBC and a lawyer.
Other government clearances show why checking matters. For PST, a buyer is told to obtain a clearance certificate before buying a business, and without one the buyer is liable for an amount equal to any outstanding amount owed by the seller. The buyer applies online or by Application for Clearance (FIN 447), with the seller's consent as the PST collector.
Employees matter too. If all or part of a business is disposed of, employment is deemed continuous, so the buyer takes on the seller's obligations to employees who stay. If the seller terminates employees before the sale, the purchaser is not liable for their outstanding wages and compensation. Build any clearance request into your closing timeline.
Key takeaways
- Check the seller's WorkSafeBC account status before closing, and confirm with WorkSafeBC and a lawyer whether unpaid premiums could pass to you.
- For PST, a buyer without a clearance certificate is liable for an amount equal to any outstanding amount the seller owes.
- If all or part of a business is disposed of, employment is deemed continuous, so the buyer takes on obligations to employees who stay.
- If the seller terminates employees before the sale, the seller owes their outstanding wages and compensation and the purchaser is not liable.