How to Buy an Existing Business in Saskatchewan Step by Step

Buying an existing business can be faster than starting from scratch, but it involves more legal and tax steps than most first-time buyers expect. Knowing the order of the stages helps you plan your time, your money and your advisers.

This roadmap walks through the stages for a Saskatchewan purchase. It is general information only. Every deal is different, so confirm the details for yours with a lawyer and an accountant.

This article covers the law of Saskatchewan.

Step 1: Decide what you want and find a business

Start with your budget, your experience and the kind of business you want to run. Then look at businesses for sale through brokers, listings and your own contacts. Ask for basic information early, such as the type of business, how it is owned and why the owner is selling.

Work out how you will pay. Whether you need a lender, a vendor loan or investors affects the timing of everything that follows.

Step 2: Sign a confidentiality agreement

Sellers rarely share financial records, customer lists or contracts until you agree in writing to keep them private. A confidentiality agreement, sometimes called an NDA, sets out what is protected, how you may use it and for how long. Read it before signing and keep your advisers within its limits.

Step 3: Choose a structure and agree a letter of intent

In an asset purchase, you allocate the price to each asset at fair market value, then to inventory, with the balance going to goodwill. In a share purchase, the tax values of the corporation's assets do not change and you inherit its tax history. Buying shares is generally not subject to GST/HST, while an asset purchase can attract it unless an election applies.

Sellers often prefer a share sale. The lifetime capital gains exemption is generally available to individuals selling qualified small business corporation shares, and the CRA describes the 2025 amount as $1,250,000, indexed to inflation. Confirm the current figure with your accountant.

A letter of intent then records the main terms. Whether any part of it is meant to bind you depends on how it is worded. The wording controls, so have it reviewed.

Step 4: Do your due diligence

Due diligence is your chance to check what the seller has told you. Your lawyer and accountant review the financial statements, tax filings, contracts, leases, licences and employee records.

• Search the Saskatchewan Personal Property Registry by debtor name or serial number to find liens on equipment or inventory.
• If you buy assets, plan to require discharges or payout from the price at closing.
• For an unincorporated business, confirm the business name registration, which renews every three years.
• If it is a franchise, the franchisor must give you a disclosure document at least 14 days before you sign or pay anything.
• Check employee terms. Service is maintained for notice purposes when an employee keeps working after a sale.
• If the seller is a non-resident of Canada, ask your lawyer about section 116 of the Income Tax Act, because a buyer may become liable for the vendor's tax and may withhold 25% (50% on certain types of property) without a CRA certificate.

Under the Competition Act, notice is generally required only if the target's Canadian assets or revenue exceed $93 million and the parties' combined Canadian assets or related revenue exceed $400 million, and most small Saskatchewan business deals fall well below those amounts. If you are a foreign investor, Investment Canada Act rules may also matter.

Step 5: Negotiate and sign the purchase agreement

The purchase agreement sets out the price, what is included, promises from the seller, conditions that must be met before closing and what happens if something goes wrong. For an asset deal, it will usually list the assets and how the price is allocated.

If you buy assets, buyer and seller may jointly elect under section 167(1) of the Excise Tax Act so that no GST/HST is payable on the sale, but the election does not apply to a sale of only individual assets, and GST/HST still applies to certain items such as taxable services the seller will render, taxable leases or licences, and real property sold to a non-registrant. The election requires the seller to supply a business or part of a business, and the buyer to acquire all or substantially all of the property reasonably necessary to carry it on. The CRA generally treats that as 90% or more. The election is unavailable if the seller is a GST/HST registrant and the buyer is not.

Step 6: Close and finish the paperwork

At closing, money and documents change hands, and discharges of liens are delivered. Afterwards, there are filings to complete.

• File Form GST44 if you are making the GST/HST election. A registrant buyer must file it by the due date of its GST/HST return for the first reporting period in which tax would otherwise have become payable, although the CRA may allow a later date on the buyer's application.
• Deal with Saskatchewan PST on the assets. If you bought assets to start operations, file the Business Assets Declaration within 30 days of the purchase date, with the agreement and supporting schedules.
• If the business had already started operating, report PST on the Net Tax on Consumption line of the regular return.
• Tell the CRA about changes in owners or directors, and ask whether you need a new business number.
• Register your business name if you are running an unincorporated business.

Frequently asked questions