Steps to Selling Your Business in British Columbia, Start to Close

Selling a business usually takes months, and most of the work happens before a buyer is even involved. Owners who tidy up their records, debts and contracts early tend to face fewer surprises when a buyer starts asking questions.

This article sets out the typical sequence in British Columbia, from preparation through closing, and flags the legal and tax checkpoints along the way. Every sale is different, so treat it as a map rather than a plan.

This article covers the law of British Columbia.

Step 1: Prepare the business and your records

Start by gathering financial statements, tax filings, contracts, leases, employee lists and equipment records. A buyer will want to see them, and gaps slow the deal down.

Search yourself first. The Personal Property Registry records security agreements, commercial liens and buyers' interests in goods left with the seller. A registration may still be live even if it looks old, because registrations run for 1 to 25 years or for an infinite term. Knowing what is registered against your equipment and inventory lets you plan payouts.

Step 2: Decide the structure and understand the tax

In an asset sale, the price must be allocated to each asset at fair market value, with the remaining balance attributed to goodwill, and the allocation should match what the vendor reports. Goodwill since January 1, 2017 is depreciable property in CCA Class 14.1, claimed at 5%. In a share purchase, the change in ownership does not change the tax values of the corporation's assets, and share purchases are generally not subject to GST/HST.

If you are selling shares of a qualified small business corporation, the lifetime capital gains exemption may matter. The CRA lists it at $1,250,000 for dispositions after June 24, 2024, though the 2025 figure is listed as proposed, so confirm the current amount and whether your shares qualify with an accountant.

Steps 3 and 4: Find a buyer and agree on terms

Buyers may come through a broker, your industry contacts or listings. Before sharing sensitive information, many sellers ask the buyer to sign a confidentiality agreement. Once a buyer is serious, the two sides often sign a letter of intent setting out the main terms. A lawyer can explain which parts of it are meant to bind you.

Several points are worth raising while negotiating:

• GST/HST: if the buyer acquires all or substantially all (at least 90%) of the property needed to carry on the business, you may jointly elect (Form GST44) so no GST/HST is payable on the sale. The election is unavailable where the supplier is a registrant and the recipient is not, and even with the election, GST/HST can still apply to certain services, leases and licences, and, for non-registrant recipients, sales of real property.
• PST: on an asset sale, goodwill, accounts receivable, franchise fees, real property and shares of a business are non-taxable, and inventory is exempt if the buyer gives a PST number or a Certificate of Exemption – General (FIN 490). Parties cannot raise the goodwill price and lower the taxable-asset prices to avoid PST.
• Non-resident buyers or sellers: a purchaser of taxable Canadian property from a non-resident must remit 25% of the amount by which the cost exceeds the certificate limit, unless an exception applies.
• Deposits: if the sale includes land or a lease, paying or accepting a deposit counts as an act that can make a contract respecting land enforceable.

Step 5: Due diligence

The buyer will test what you have told them. Expect searches on the PPR, land title if you own property, bankruptcy records and corporate records. A land title search costs $11.06 as at April 1, 2026, plus any electronic transaction fee and GST if done through an LTSA account.

Buyers will also look at PST. The buyer is told to obtain a PST clearance certificate before buying a business, and applies online or by Application for Clearance (FIN 447) with the collector's consent. Being ready to give that consent helps the deal move.

Employees are another focus. If all or part of a business is disposed of, an employee's employment is deemed continuous, so the buyer takes on obligations such as past service. If you terminate employees before the sale, you owe their outstanding wages and compensation and the purchaser is not liable. Talk to a lawyer before choosing that route.

Step 6: Closing and what comes after

At closing, the buyer pays, ownership transfers and lenders are dealt with. A debtor, or any person with an interest in the collateral, can give a written demand that a secured party amend or discharge a registration, and the secured party must register a financing change statement within 40 days. Start that early rather than on closing day.

Afterwards, a change of owners may require a new CRA business number and program accounts, and for corporations the CRA needs the correct name and social insurance number of each director. Keep in mind that a court proceeding on a misrepresentation or breach of warranty claim must not be commenced more than 2 years after the claim is discovered.

• Gather financial, tax, lease, contract and employee records.
• Search the PPR and land title against your own business.
• Decide between an asset sale and a share sale with your accountant.
• Sign a confidentiality agreement before sharing sensitive details.
• Have a lawyer review the letter of intent and purchase agreement.
• Request lender discharges well before closing.
• Be ready to consent to the buyer's PST clearance application.
• Keep records of the sale for tax reporting.

Frequently asked questions